Solarcentury chief welcomes “gamechanging” new calculations of solar’s high capital efficiency versus oil
In a historic report, BNP Paribas introduced investors to the new concept of Energy Return on Capital Invested. “We think the economics of renewables are impossible for oil to compete with when looked at over the cycle”, report author Mark Lewis, Global Head of Sustainability Research concludes. “We calculate that to get the same amount of mobility from gasoline as from new renewables in tandem with EVs over the next 25 years would cost 6.2 to 7 times more. The economics of oil for gasoline and diesel vehicles versus wind- and solar-powered EVs are now in relentless and irreversible decline, with far-reaching implications for both policymakers and the oil majors.” “Both the majors and the national oil companies are effectively in a race against time. The simple truth is that the oil industry has never before faced the kind of threat that renewable electricity and EVs pose to its business model. For the first time there is a competing energy source with a short-run marginal cost of zero, that is much cleaner environmentally and will be able to replace up to 40 per cent of global oil demand once it has the necessary scale.”
Solarcentury CEO Frans van den Heuvel said: “This is a whole new dimension in the catalogue of advantages and benefits solar has over oil, a potential gamechanger of a report. Strong as the case already is for all who care about climate chaos to accelerate solar to planet-saving scale, this provides a further unignorable imperative.”
Solarcentury founder and director Jeremy Leggett added: “That our technologies provide such irresistible routes to capital efficiency should now galvanize governments, corporations, and investors to accelerate the solar industry from today’s 100 GW a year to the terawatt a year we will quickly need to get to if we are to play the role required of us in civilisation’s fight for survival. We know we can do this. Scale is not scary to us.”
BNP Paribas agrees. The report concludes: “We think the oil majors should be accelerating the deployment of capital into renewable-energy and energy-storage technologies and/or reducing re-investment risk via higher dividend payouts to shareholders.”
