SHARM EL-SHEIKH, Egypt, Nov 8 (Reuters) – Norwegian energy giant Equinor is on track to nearly double the share of its investment in renewables this year, despite scrapping costly offshore wind deals , the chief executive said on Tuesday.

About 20% of the company’s gross investment in 2022 will be in renewable energy, CEO Anders Opedal told Reuters on the sidelines of the UN COP27 climate summit in Egypt.

This is an increase from the 11% of its capital budget the previous year. The company declined to give underlying numbers. Equinor previously guided approximately $23 billion in gross renewable energy investments for 2021-2026.

As of last year, Equinor had 0.7 gigawatts of renewable energy capacity and is accelerating its investments to reach its goal of 12 to 16 gigawatts by 2030. About two-thirds of this capacity is expected to come from wind. offshore.

The jump in investment has come even as profits from renewable energy projects are being squeezed due to rising costs and increased competition, particularly in offshore wind.

“When we saw very high prices for access to new areas, we were disciplined with capital, because it’s not about achieving a gigawatt ambition, it’s about creating a profitable renewable business,” Equinor’s Opedal said.

Earlier this month, the company bought Danish solar developer BeGreen for an undisclosed amount. Read more

Oil and gas companies have had to adjust their expectations on project returns as many have invested in renewables to position themselves in the long-term movement towards low-carbon energy, where projects typically do not provide the double-digit returns than can fossil fuels.

Equinor targets returns of between 4% and 8% for renewable energy investments. Analysts say even 4% may be difficult to achieve in offshore wind projects planned in recent years.

Opedal noted a change in attitude towards oil and gas producers at COP27, with more interest in dialogue, after the industry was barred from last year’s COP in Glasgow, partly because of its contribution to global carbon emissions.

“I was supposed to come to COP last year, but I didn’t find the right atmosphere for a discussion of energy realities,” Opedal said. “Unfortunately, the energy crisis and war in Ukraine has created a better understanding of the trilemma of energy security, decarbonization and affordability.”

Reporting by Sarah McFarlane; Editing by Bernadette Baum

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