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Big Solar is already outperforming Big Oil – learn how
Solar companies you might never have heard of is now providing the world with more useful energy than the oil giants often referred to as Big Oil.
Exxon Mobil, BP, TotalEnergies, Shell, and Chevron are familiar company names to most people around the world. Around the mid-20th century, the predecessors of these international oil companies attained such power that they were nicknamed the Seven Sisters.
But that was then. Today, a group of seven completely different energy companies are growing into global powerhouses. But this time, it’s not dirty fossil energy they are bringing to the table. It’s renewable solar power.
These companies, Tongwei Co., GCL Technology Holdings Ltd., Xinte Energy Co., Longi Green Energy Technology Co., Trina Solar Co., JA Solar Technology Co., and Jinko Solar Co., may not be on your radar yet. But don't be surprised if they become household names in the near future.
Bloomberg has calculated that these seven solar companies, the biggest in the world, are now providing the world with more useful energy than all of the Big Oil (ExxonMobil, Chevron, Shell, BP, Eni, and TotalEnergies) combined.
At first glance, this might seem strange, considering that fossil fuels still make up 77 percent of the world's energy supply and around 60 percent of all electricity production.
So let's start by clarifying a few things. Firstly, Big Oil isn't so big anymore. China's two state-owned oil companies, as well as Saudi Aramco, had greater revenues in 2022 than any investor-owned oil company.
Secondly, the 77 percent mentioned above refers to primary energy, which is energy as it is available as resources—such as the fuels burnt in power plants—before it has been transformed. It relates to coal before it has been burned, or barrels of oil.
Photo by Maria Lupan on Unsplash
This is the most widely available statistic and very commonly used. The problem is that much of this energy can never be used by anybody. Around two-thirds of the primary energy goes to waste. In thermal power plants – which convert fossil fuels, biomass or nuclear into electricity, up to two-thirds of the primary energy is wasted as heat. For every three units of energy we put in, you get just one unit of electricity out. The same goes for cars with combustion engines. These engines can only transfer 30% of the input energy to move the car, while 70% is wasted as heat and noise.
What Bloomberg does is compare the amount of Useful energy delivered by Big Oil versus Big Solar. Useful energy is the energy that goes towards the desired output of the end-use application. For a lightbulb, it’s the amount of light that is produced. For a car, it’s the amount of kinetic (movement) energy that is produced.
Graph from Our World in Data
Oil companies' production can be measured in exajoules, a unit of energy. An exajoule of electricity would be able to power Australia or Italy for a year. According to Bloomberg, ExxonMobil produces about 8.3 exajoules of energy annually, while Shell produces 6.2 exajoules. However, much of this energy is lost as heat and noise, so on average, only about a quarter of it is actually used.
Solar companies like Tongwei and Longi also produce significant energy. They measure their production in metric tons of polysilicon, which is used to make solar panels. When converted to exajoules, their energy output is impressive and can rival big oil companies like BP, Eni, and ConocoPhillips.
Photo by American Public Power Association
For instance, if Tongwei goes ahead with its plan to build a huge polysilicon plant, it could produce more energy than ExxonMobil. And when Bloomberg takes into account what each group of companies can produce without major additional investments — comparing the volumes in oil firms' geological reserves to what solar companies will be able to produce before depreciation wears out their plant — clean power moves clearly into the lead.
Moreover, solar panels continue to generate electricity for decades, unlike oil and gas, which are used up quickly. Solar panels often come with 25-year warranties, ensuring long-term clean energy production.
ABOUT BIG OIL
- Big Oil is a name sometimes used to describe the world's six or seven largest publicly traded and investor-owned oil and gas companies, also known as supermajors. The term, particularly in the United States, emphasizes their economic power and influence on politics. Big Oil is often associated with the fossil fuels lobby and also used to refer to the industry as a whole in a pejorative or derogatory manner.
- Sources conflict on the exact makeup of Big Oil today, though the companies which are most frequently mentioned as supermajors are ExxonMobil, Chevron, BP, Shell, Eni and TotalEnergies, with ConocoPhillips frequently being included as well prior to spinning off its downstream operations into Phillips 66.
- Big Oil previously referred to seven oil companies which formed the Consortium for Iran; such "Seven Sisters" were the Anglo-Persian Oil Company (a predecessor of BP), Shell plc, three of Chevron's predecessors (Standard Oil of California, Gulf Oil and Texaco), and two of ExxonMobil's predecessors (Jersey Standard and Standard Oil of New York).
- It should be noted that the companies that ”Big Oil” refers to aren’t the biggest players in the global market anymore. Far from it. The term excludes the national producers and OPEC oil companies who have a much greater global role in setting prices than the supermajors. China's two state-owned oil companies, Sinopec and the China National Petroleum Corporation, as well as Saudi Aramco, had greater revenues in 2022 than any investor-owned oil company.
Editor's note: This article has been edited (June 25) thanks to relevant input from Valentin Monteiro, Head of Sustainability at Schneider Electric Sweden. Read his full comment below.
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Great news!
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This is the kind of news we need and they inspire us to keep talking about climate change.
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Interesting how Saudi Aramco, the world's biggest oil producer by far, gets no mentioning.
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I would encourage to be more cautious when looking at this type of announcements. They often need to be put in perspective, couple of facts & reflections that might help to think this through: #1 (fact). The 7 "Big Oil" companies mentioned in Bloomberg's article produce about 18 Million barrels per day (Mbd), which is less than 20% of the Global Oil Production (in 2022), about 94 Mbd. #2 (fact). The 8 Chinese "Big Solar" companies mentioned, have an estimated yearly capacity to produce solar panels generating about 1 592 TWh of Electricity, which is equivalent to almost 98% of the Global Solar Electricity produced (in 2023), about 1 630 TWh. #A (reflection). The 8 Chinese "Big Solar" companies we are looking at are much more predominant on the Solar panel market than the 7 "Big Oil" companies are on the Oil production market. #B (reflection). The 8 "Big Solar" companies seem to have currently the annual manufacturing capacity to double the potential of Solar Electricity produced globally on a yearly basis. This is indeed quite impressive, to feed the current (not "exponential", but very rapid) growth of solar electricity production. #3 (fact). A very small share (about 5%) of Global Oil production is leveraged do generate electricity in 2023. #4 (fact). Solar already produced more electricity in 2023 (about 1 630 TWh, or about 5,5% of the total electricity produced) than Oil powered electricity generation (about 789 TWh, or 2,7% of the total). #C (reflection). Given their market share, the estimated contribution from the "Big Oil" companies to global Electricity production is about less than 1% whereas the "Big Solar" represent about 5% of the global Electricity production Today. #5 (fact). A kWh of electricity produced by a solar panel (or other intermittent energy sources) and a kWh of electricity produced by an Oil-powered plant (or other controllable base-load energy sources) requires a different level of grid & network infrastructure complexity to be able to provide the desired 24/7 power supply and required demand=supply balance of the grid. #6 (fact). Despite the thermodynamic limitations (touched in the article, differentiating primary and useful energy), it's good to remind that a big part of the heat generated is not always a lost or wasted. Our society and industries requires a lot of comfort and industrial heat to operate. For e.g. Combined Heat & Power plant (recovering heat from the power generation plant) are a very good way to achieve much greater ratio of useful vs primary energy. #7 (fact). Our Total Global Primary Energy consumption in 2022 was about 644 EJ (Exajoules), Fossil fuels (Oil, Coal and Natural Gas) represented together about 494 EJ (about 77% of the Total), Oil alone was about 191 EJ (about 30% of the Total), Solar was about 12 EJ (about 2% of the Total, of which about 6 EJ is for Solar electricity). #D (final reflection). Even assuming that (which is obviously not realistic): 1. All Oil produced for energy is converted into Electricity (with a 25% overall efficiency); 2. There is absolutely no useful heat recovery use from the above; 3. A kWh of intermittent sources and base-load sources is comparable "as-is"; Oil would have the capacity to generate about 48 EJ of Electricity, 8 times more than Solar, of which the "Big Oil" alone would contribute to 20%: a bit more than 9 EJ, meaning still 50% more than the "Big Solar" that we have understood, seem to represent the majority of all Solar panels generating electricity. (Sources: Statista.com and Ourworldindata.org)
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@valentin_monteiro, thank you for your insightful comments. The article has now been updated, and certain paragraphs clarified.
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Ja, diese Bloomberg-Studie motiviert zum Weiterdenken und Weitersagen. Wedonthavetime ist es erneut gelungen, dass auf Erkenntnisse Handlungen folgen können. Bravo!
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Very encouraging and inspireful.
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Amazing and important to remember!
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@Ingrid_Hesser_1 Indeed..how can we forget about something good for us all?
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Oh wow it is Greatest act in history perhaps 🤔
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Impressive to see how these solar companies are surpassing the energy output of traditional oil giants. We hope and expect these solar companies to become household names
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@dickson_mutai Solar firms are already rivaling Big Oil in energy production efficiency, longevity, and environmental impact, signaling a significant shift in the global energy landscape.
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This is great news! 👏💚
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@gorffly_mokua At least there's light at the end of the tunnel.
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amazing news
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@Virginiah_391 It is indeed great news! 👏💚
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@Virginiah_391 Indeed
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Wow! Thank you for explaining it in such simple words. For example, I did not know that only about a third of fossil fuels burnt is actually used, and the rest is converted to heat and noise? No wonder the planet us turning into a hot plate. We have to stop this the soonest possible!
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@varsa_mahananda_156 True. A real change is needed to stop all this bullshit from fossil fuel companies. For once they need to spare generations to come including their generations.