Norway-based energy company Equinor has retired its target to reach 10 – 12 GW of installed renewable energy capacity by 2030, with CEO Anders Opedal citing less favorable economics for projects since initially setting the goal, and acknowledging at the company’s Capital Markets Day that “we have seen for several years that we will not reach that target.”
The retirement of the goal marks the latest in a series of scale-backs of Equinor’s renewables commitments, since the company launched its energy transition strategy in 2021. At the time, Equinor said that it planned to increase the share of gross capex for renewables and low carbon solutions from around 4% in 2020 to more than 50% by 2030, and to reach renewable energy installed capacity of 12 – 16 GW by 2030. Early last year, however, the company retired its 50% gross capex goal, and lowered its 2030 renewable energy installed capacity target to 10 – 12 GW.
Asked about the change in strategy at the Capital Markets Day this week, Opedal said that the company had “a totally different view of the market” when it introduced its energy transition plan five years ago, but saw very quickly that lease prices increased very rapidly, and noted that in light of the higher costs, “although we had allocated capex to those types of projects, we decided not to do them.”
Opedal later added:
“What we have seen for renewables is that with higher cost and quite expensive lease rounds… our pipeline is thinner than we thought. We have seen for several years that we will not reach that target.”
Opedal estimated that the company will reach approximately 6 – 7 GW of renewable energy capacity in 2030.
Equinor also set a target in 2021 to transport and store 30 – 50 million tons of CO2 by 2035. At its Capital Markets Day, the company said that it has secured enough storage space to deliver on its target “should the market be there,” but said that businesses have slowed their pace of investment in decarbonization. Irene Rummelhoff, EVP, Marketing, Midstream & Processing at Equinor added that the market was being impacted by a lower cost of emitting CO2, “at the same time as politicians and nations who would have to put in money have less to spend, focusing on defense spending, social budgets, etc. Customers alone cannot lift this – it needs to be a public-private partnership, and there’s no ground for that.”
At the investor event, Equinor announced a goal to increase power production to more than 20 TWh in 2030, up from 5.7 TWh in 2025, which will come from renewables as well as flexible assets such as gas power.
