Oil and gas companies are slowly but surely moving toward the renewable market. While some take baby steps, the energy transitions has worked out well for some early adopters.

In 2015, the Danish Oil and Natural Gas (DONG) Energy company made the largest loss of any company in Denmark’s history, the equivalent of $1.78bn today. It had been a bad year for the company’s oil and gas investments, leading to a $1.4bn cost to disposing of assets in the North Sea.

At that point, oil and gas was a small part of the company’s business, as it had steadily moved toward wind energy developments over several years. In 2016, it put just 4% of spending into oil and gas, and the firm decided to finally part with the last of its fossil fuel business.

That year, DONG’s net profit leapt from $150m (1bn DKK) to more than $1.76bn (12bn DKK), as contracts paid off and the company sold its remaining oil and gas assets. It has since kept the momentum going under the new name of Ørsted, after the Danish scientist who made wind power possible.

The company is a much bigger player in the wind developments than it ever was in oil and gas. This year will see the full completion of Hornsea 1, the world’s largest offshore wind development, operated by Ørsted. By 2030, it plans to more than double its wind generating capacity in Europe to over 100 GW.

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It now has operations in the US, where it has begun work on windfarms off the coast of New Jersey. Construction recently started on the company’s first solar and storage projects in Texas. Ørsted also dabbles in bioenergy, and it completed a coal-to-biomass conversion on a Danish power plant in late 2019.

Who else is making an energy transition?

Where Ørsted has led, others follow, and several majors seem to be making similar investments.

In 2017, Statoil began operations on the world’s first floating wind farm, offshore Scotland. It can deploy the turbines used on the Hywind Scotland development in depths of 800m. This is well beyond that of conventional turbines, opening up vast deepwater areas to power development. In these areas, companies with offshore experience thrive.

However, the existing technology is limited, and Hywind Scotland is one of only two operational floating wind farms. Statoil, now Equinor, was awarded a $220m (2.3bn NOK) to construct a new floating wind farm in 2019. Ironically, the investment aims to reduce the cost of powering oil and gas platforms.

In recent years, BP has returned to the renewables after closing its solar business in 2011. Late last year, the company created a joint venture with US agricultural company Bunge to focus on bioethanol production. In doing so, it has walked straight into becoming the country’s second largest biofuel sugarcane crusher. More than 10,000 staff will crush 32m tons of sugarcane per year, producing 1.5bn litres of ethanol.

New technologies: Oil and gas jump to the cutting edge

The oil and gas industry is counting on carbon capture and storage (CCS) to give the emissions reductions it seeks. However, CCS also enables gas to be converted in hydrogen, and projects such as Acorn in the UK incorporate a hydrogen production facility.

Hydrogen can also be produced by electrolysing water, and in 2017 Shell announced it would develop the largest PEM hydrolysis plant in the world. It worked with hydrogen project design and manufacturing firm ITM Power on the German plant, which would produce the fuel with no direct emissions.

ITM is also developing hydrogen technology with another former oil and gas player. In late 2019, the company submitted a proposition for offshore wind-to-hydrogen generation in a UK government competition. If developed, this would be a move into offshore wind for ITM. It would also be a big move into hydrogen for its partner, wind generation company Ørsted.