NicoElNino/Shutterstock Save for later Print Download Share LinkedIn Twitter The oil and gas industry’s spending on renewable power generation continues to leap higher, despite rising investor questions around returns, our Low-Carbon Investment Tracker shows. Wider energy transition spending is diversifying as more players join the fold and earlier-stage ventures such as hydrogen and carbon capture take off. But we see European players broadly sticking with their renewable electricity ambitions, committing billions to future investments even as strategic approaches continue evolving.BP’s strategic rejiggering and others’ restructurings have put industry investment in renewable power in the spotlight. But while companies investing in this space have a trickier calculus to make given currently wide disparities between returns in upstream and in renewable power, we caution against overreading the potential impacts on absolute investment flows.Announced and approved investments in renewable power generation hit a record $62.2 billion in 2022 for the 34 oil and gas producers tracked by Energy Intelligence. That marked a more than 30% increase over 2021 and more than doubled 2020 levels. Crucially, numerous investments still center on expanding project pipelines — as with Shell’s acquisition of India’s Sprng Energy, TotalEnergies’ stake in US firm Clearway, and Eni affiliate Plenitude’s acquisition of European developer PLT — paving the way for years of still-rising investment levels.Even BP’s pivot is more about appeasing equity markets by reducing capital exposure and focusing in-house efforts on higher-return integrated power with hydrogen and trading than reneging on targets. The UK major still intends to deliver 50 gigawatts of net projects to final investment decision this decade, but will now lean more heavily on its self-funding “development and sell” Lightsource BP model than owning capacity in perpetuity. Total is meanwhile undeterred in its in-house renewables buildout, with the French major leveraging its early-mover status to build an integrated power business now delivering $1 billion in annual operating cash flows — a threshold it says justifies breaking out its results from integrated gas starting this quarter. “There are not so many companies able to grow their renewables business by 7 GW in a year … We are among the top, and so, again, when we do things in Total, we are consistent,” CEO Patrick Pouyanne affirmed last week.So is everything steady as she goes? Not exactly. As BP’s changes, Shell’s reorganization, Equinor’s renewables unit restructuring, and Eni and Repsol’s stake sale initiatives all indicate, the most effective model for oil and gas company participation in renewable electricity is far from clear, making these — and future — course corrections inevitable. At the same time, it is likely, in our view, that a spectrum of models ultimately develops to reflect diverse entry points, geographic footprints and skill sets — much in the way upstream portfolios vary even as all chase “advantaged barrels.” Some will lean toward spinoffs or separation; others, maximum integration. In a way, BP blends both. Despite the absence of a “one size fits all” answer, we expect leading European producers to continue ramping up renewables investments for the foreseeable future.