Oil and gas giant BP recently walked back the net-zero targets it introduced in 2020, saying the company had moved ‘too far, too fast’. The announcement is part of a worrying trend of energy providers and other multinationals reducing or watering down their sustainability strategies. Here, Mike Torbitt, managing director of resistor manufacturer Cressall, explores the causes behind this movement and explains the role that resistor technology can play in meeting sustainability targets.
In February 2025, BP announced plans to cut its budget for renewable projects by $5 billion, while simultaneously increasing its investment in fossil fuels to $10 billion per year.
The decision will see the oil giant produce 2.4 million barrels of oil per day by 2030. Given that just 36 fossil fuel companies are responsible for over half of the planet’s emissions, this step backwards has a hugely damaging potential.
But BP is not the only energy provider to backtrack on its sustainability commitments. The move comes a year after fellow oil giant Shell dialled back its 2030 target to cut net carbon intensity from 2016 levels, lowering its goal from 20 per cent to a range of 15 to 20 per cent. But why are energy providers turning their backs on these objectives?
Profit versus planet
Currently, renewable energy projects such as wind and solar are simply not returning as much profit for oil and gas companies as fossil fuels. According to 2023 figures from NPR, US companies producing oil and gas could expect to make a return of between 20 and 50 per cent return on investment on the capital invested into projects. For solar and wind projects, the estimated figure stands at just five to ten per cent.
Consequently, there is less investor interest in the stocks of oil companies that are diverting their budgets towards wind and solar. Take for example the five-year period between the end of 2019 and the end of 2024. New York Times data shows that BP’s stock prices fell by 19 per cent and Shell’s grew by around 15 per cent. Meanwhile, the stock price of competitor Exxon Mobil, which did not invest in wind and solar energy, grew by over 70 per cent.
There are a few major barriers to profitability. The first is that oil companies may lack the sector-specific experience required in order to succeed with wind and solar projects.
Exxon Mobil instead chose to invest in hydrogen and lithium extraction, since the skills needed are very similar to those used in extracting oil. While the mining of these elements comes with its own environmental concerns, both are vital components in the production of battery-powered vehicles.
A second factor affecting profitability is the high initial investment costs for renewable projects combined with the low prices of solar and wind power. This means that it takes years, or even decades, for investors to see return on investment.
Improving infrastructure
While these energy sources have become less expensive to generate in recent years, they tend to produce energy during the same time periods. For instance, on a particularly windy day, the wind energy produced will outstrip demand, which drives down prices. Additionally, wind turbines are increasingly being turned off as the grid is unable to cope with this surplus.
One solution to this issue is using interconnectors, high-voltage direct current (HVDC) cables that connect the energy grids of different countries, enabling the movement of renewable energy to international markets where demand is higher. HVDC technology is ideal for long-distance transmission with minimal energy losses.
In HVDC systems, resistor technology plays a vital safety role by dissipating excess wind energy during faults, helping to stabilise the grid and prevent damage. DC neutral earthing resistors also add a further layer of protection to HVDC converter transformers, both offshore and onshore, by managing fault currents and ensuring system reliability.
Ultimately, privately owned oil and gas companies are more likely to be driven by shareholder interests than they are by environmental targets. However, by ensuring that the correct infrastructure is in place to make the most from the renewable resources, it’s possible to improve both sustainability and profitability.
