Oil & Gas
Why is big oil backing energy-tech startups?
Top oil companies like Shell, Total, BP and ExxonMobil are betting big on green energy start-ups signalling that the future of oil may be green.
According to a compilation by Bloomberg, these oil companies are putting money into ventures probing the edge of energy technologies. The investments go beyond wind and solar power into projects that improve electricity grids and brew new fuels from renewable resources.
Some of the projects reviewed, a unit of Royal Dutch Shell Plc splits its spending between oil and gas technology and clean energy equally. The green share is forecasted to increase to about 60 percent in the years ahead.
In Nigeria, Shell Nigeria created All-On, a unit charged with catalysing market-based energy solutions that are attractive, affordable and sustainable for small businesses and households in Nigeria, through the establishment of an independent, non-profit social enterprise focused on improving energy access in the Niger Delta.
The objective is to resolve power supply challenges for some of the 27.9 million households in Nigeria and 10.6 million SMEs who are either totally off grid or have a ‘bad grid’ connection with less than 4 hours of electricity per day according to an energy needs assessment commissioned by Shell.
French energy giant, Total has a unit which has invested $160 million with almost three quarters flowing into North America, according to the fund’s CEO Francois Badoual.
It has invested AutoGrid, a California-based company that designs smart-grid software United Wind, a company that leases wind turbines to retail customers and small businesses. Off Grid Electric, a Tanzania-based installer of rooftop solar panels that works in low energy-access areas in Sub-Saharan Africa. In Nigeria, the company is investing in solar lightening for households.
As for BP, it created a ventures unit which has invested $325 million mostly in chemicals or fuels, rather than renewable electricity. It has funnelled money into:
Tricoya Technologies, a maker of a technology that changes the chemical structure of wood chips to make a building material that’s more durable and energy efficient. Fulcrum, a producer of bio-jet fuel made from municipal waste, which raised $30 million from BP. Solidia, a company that is working on reducing the carbon footprint of concrete.
Exxon Mobil’s approach is geared towards frontier technology. It prefers to conduct research internally and with partners rather than buy minority stakes in start-ups. It is studying biofuels, carbon capture and storage, energy-efficiency processes and energy-saving materials, according to spokesman William Holbrook.
The company is working with Synthetic Genomics Inc., which studies how to make biofuels from algae. FuelCell Energy Inc., which is developing carbonate fuel cells to capture CO2 emissions from natural gas plants while also producing electricity.
In the case of Chevron, it has been investing in start-ups since 1999 and divides its portfolio between oil and gas, advanced materials, communications infrastructure and information technologies and emerging and alternative energy.
It is investing in Acumentrics, a fuel cell company that can make its products from ceramics. It also has interests in Ensyn, a maker of fuels and chemicals from residue from forests and agriculture and Inventys, a developer of carbon capture technology that traps CO2 from industrial gas streams.
The unit of Norway’s state oil company, Statoil ASA, has invested $20 million since February 2016. It only funds renewable start-ups, listing among its investment themes wind, solar, storage, transportation, energy efficiency and smart grids.
It is putting its money in ChargePoint Inc., an electric-vehicle charging point operator based in California. Oxford Photovoltaics Ltd., a solar technology company that is developing panels with perovskite. The substance could make traditional photovoltaics as much as 30 percent more efficient. Convergent, a large-scale energy storage developer working on projects with lead acid, lithium-ion and flywheel batteries in the US and Canada.
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