Ten years ago, you knew where you stood with your energy suppliers. Oil companies sold road fuel, while utilities supplied electricity and gas. Today, those old lines of demarcation are blurring: utilities can fill up your car and oil companies want to keep your lights on. Technological progress and the threat of climate change are forcing both oil companies and utilities to rethink their strategies, and are pushing them into each other’s territory.
The result is set to be a period of intensified competition and instability, as companies that were previously able largely to forget about each other are now forced to battle for dominance. On Sunday Royal Dutch Shell, one of the world’s largest oil and gas companies announced that its First Utility retail power business would be rebranded as Shell Energy, with 700,000 households switched to renewable power.
Customers will be offered not only cleaner electricity but discounts on fast charging for their electric vehicles as well as broadband and smart-home technologies. Shell has floated the idea that by the 2030s it could be the largest power company in the world.
Meanwhile, Enel, the Italian electricity group that by some measures holds that title today, last week highlighted the rapid growth in its network of electric car charging points. By the end of 2018 it had installed 49,000 worldwide – up 63 percent during the year, chief executive Francesco Starace said as he announced annual earnings.
The competition to provide the best offerings is given an additional edge by a clash of cultures. People who work in the high-stakes world of oil and gas have traditionally looked down on the humdrum plodders of the electricity sector, described by one gas executive as “useless”. The next decade will reveal whether that confidence is justified.
On the oil side of the energy industry, pressure from investors is forcing companies to look at ways to curb greenhouse gas emissions, while the rise of electric vehicles is threatening to put a brake on the growth in demand for crude. Vitol, the world’s largest independent energy trader , said last Tuesday it expected oil demand to peak within 15 years, and intended to focus on cleaner fuels and