Portuguese oil company Galp Energia said on Tuesday it will kick off its green business by installing renewable energy capacity of 10 gigawatts in the decade ahead.
Galp, which last month bought solar power projects from Spain’s ACS for 2.2 billion euros (£1.8 billion), hopes to install 3.3 gigawatts of solar energy in Portugal and Spain alone by 2023, generating more than 10% in equity returns.
Fossil fuel companies are racing to adapt to investor-demands for more sustainable business models as public awareness of climate change grows.
Galp sees itself as well-placed to “build a competitive renewable business” from its location on the Iberian peninsula with its 1,800 solar hours per year.
From this year onwards, it said that more than 40% of Galp’s capital expenditure, between 1 billion to 1.2 billion, will be spent on the energy transition, which includes renewable energy and a natural gas project in Mozambique.
Galp is the largest oil and gas group in Portugal, where it distributes gas and sells petrol.
Traditionally an oil refinery, Galp attracted interest from investors due to its growth prospects in oil and gas production in projects in Angola, Mozambique and Brazil, where China’s Sinopec has 30% of its assets.
Globally, it competes with majors such as Royal Dutch Shell, BP, Total and Exxon.
BP last week set one of the oil sector’s most ambitious targets for curbing emissions, although some environmental campaigners accused it of greenwash and said it had not given enough detail on how it would achieve its targets.
Source: Reuters. Image courtesy of iStockPhoto.com.