2021 will mark a new record in the capital expenditures on renewable energy projects, Trend reports citing, Rystad Energy, a Norway-based energy research and business intelligence company.
The company forecasts capex on renewables to reach $243 billion, as compared to $311 billion in the oil and gas sector.
Rystad Energy expects that most of the renewable energy spending will go towards onshore wind projects, rising to $100 billion from $94 billion in 2020. Solar PV spending is expected to climb to $96 billion this year from $88 billion last year, while offshore wind will see capex grow to $46 billion from $43 billion.
Most of the expenditure stems from Asia, which has 156 gigawatts (GW) of capacity under construction as of January 2021, followed by Europe with 32 GW. China’s decision to slowly reduce subsidy assistance from January forced many projects to start construction early, which further supported spending activity. Much of the spending is down to China’s 800-megawatt (MW) Rudong offshore wind farm and the 2 GW Zhuozi County Project, as well as Orsted’s 1.4 GW Hornsea 2 project off the UK.
The company’s analysis reveals that while oil and gas-focused businesses on average saw revenue drop 23 percent in 2020 from the previous year, wind and solar PV-focused businesses enjoyed an 18 percent growth in sales.
Quarterly revenue for service companies exposed to the upstream sector has seen a massive deterioration, with fourth-quarter revenue last year slumping 25 percent from a year earlier amid a lack of new contracts and slow execution of backlog work. Revenue from well services and seismic segments fell last year by 35 percent from 2019 levels, while drilling tools revenue shrank 25 percent.
Service companies exposed to the wind and solar sectors saw growth in the fourth quarter of last year compared to 2019. Service players exposed to wind projects recorded a 15 percent year-on-year boost to revenues for the fourth quarter of 2020, with full-year revenues improving by 20 percent. Sales at service providers exposed to solar projects rose 3 percent in the fourth quarter from the year-earlier period and climbed 14 percent for the full year.
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