Covid-19 forces Galp to readjust investments. Renewables are top priority

  • ECO News
  • 8 June 2020

The Portuguese oil company is currently finalizing its entry into the future green hydrogen production project in Sines, knows ECO.

Is the energy transition an opportunity or a threat for oil and gas companies? At the Go Net-Zero Carbon Energy Virtual Summit, Susana Quintana-Plaza, member of Galp Energia’s Executive Committee and administrator of Renewables and New Business, revealed that the secret is “not to put all your eggs in one basket”. In other words, betting on very diverse business areas, such as electricity, oil and gas, solar and other renewables, and new generation fuels such as green hydrogen.

ECO knows that Galp’s entry into the Luso-Dutch project to create an industrial hydrogen unit in Sines is currently being finalized and will be officially announced soon. Also, this month the European Commission is due to unveil its Clean Hydrogen Alliance, a partnership between several European countries, including Portugal and the Netherlands, and its joint Green Flamingo project.

The additional challenge of the Covid-19 pandemic was also discussed at the same conference, especially the impact of the crisis on the investment capacity of companies. “This crisis had a major impact on all companies. There is no doubt that we all have less capital to invest and we need to be more cautious and selective. However, Galp has a lot of flexibility in investment for the coming years. There will be a major readjustment of investment priorities. We have cancelled no projects but postponed some. Some things have not been postponed: investments in renewable energy and decentralized energy production and information technology to update all the company’s systems,” said Susana Quintana-Plaza.

“Renewables are a very, very profitable business, even today and with the risks associated with these projects. Galp has not cancelled any project but has changed the investment schedule a bit,” she revealed. Even so, “the commitment to decarbonization remains,” said the administrator.

The secret, she believes, is the intelligent management of the portfolio that is diversified, interesting and innovative. “We have no doubts about renewable energy, it is something we discuss weekly in the executive committee. This is the new world of energy. We’re not shaping it anymore. We have to find markets and businesses where we can make our contribution. We are the ones who have to adapt. We have to be very selective in what we invest or don’t invest. We have to make sure that we make few bets, but very clear,” said the manager at the panel discussion.

This is how Galp, says Susana Quintana-Plaza, has maintained “faster growth than the competition”. The Portuguese oil company has been increasing its investment in renewables and in 2020 became the largest solar energy player in the Iberian Peninsula. “It doesn’t matter what technologies we have, but what we’re doing is different from the others.”