A battle for clean-energy assets is brewing between green-minded oil giants and the utility companies that currently dominate the fast-growing business.
Last week, Portuguese utility EDP became the latest energy producer to raise its ambitions for renewable energy—it plans to double capacity by 2025. It joins an increasingly crowded field, consisting not just of other forward-thinking utilities but also the European oil and gas supermajors.
Among the latter, BP won two 1.5 gigawatt U.K. offshore wind leases in February by bidding almost double the amount fetched by similar-sized leases at the same sale. A handful of auctions around the world in the coming year will further test the new competitive dynamics—and perhaps highlight the risks. Future returns for investors will depend on companies paying sensible prices.
Oil and gas shares have fallen amid growing uncertainty about petroleum’s future profitability. Renewables are an obvious opportunity: Demand for clean power is expected