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article imageOil trader Vitol embraces clean energy with wind power fund

By Karen Graham     Jul 17, 2018 in Business
London - Vitol Group, the world’s largest independent oil trader, is launching a new fund with Low Carbon to invest in wind farms in Europe, joining a string of oil majors making moves into renewable energy.
The privately owned oil trader is preparing for the shift to a low carbon world with an initial investment of 200 million euros ($234 million) into offshore and onshore wind farms in Europe through its VLC Renewables arm, run by a joint venture together with Low Carbon Ltd, according to Bloomberg News.
“By 2025 almost 27 percent of European electricity will be generated from wind and solar. As a major participant in Europe’s power markets and as a significant investor in energy infrastructure worldwide, Vitol is keen to build a portfolio of renewable investments to complement its existing activities,” said Simon Hale, a member of Vitol’s investments team, reports Reuters.
London-based Low Carbon Ltd is a principal investment firm that specializes in infrastructure investments. The firm prefers investing in renewable energy power projects with a focus on solar photovoltaic (PV), concentrated solar power, and onshore wind and tide and anaerobic digestion technologies.
Offshore Windfarm
'Middelgrunden' offshore windfarm just outside of Copenhagen. Denmark receives nearly 20% of it's electricity from wind turbines.
Wikicommons
Last year, Vitol’s VPI Immingham and Low Carbon launched a joint venture to invest up to 250 million pounds ($200 million) in energy storage in Britain. This led to the connection of two large-scale battery projects in January this year that can store a combined 50 MW to the British power grid.
Global energy industry undergoing a fundamental shift
Vitol has joined an impressive list of Oil Majors, from Royal Dutch Shell to Total and British Petroleum (BP). in expanding their portfolios with renewable energy sources and products.
The fossil fuel industry is already looking toward the future and the potential to have a clean energy economy. Oil companies have bought into solar developers and electric vehicle charger companies as a way to diversify and assure future growth.
Shell has also ventured into offshore wind and is part of a consortium that’s building two projects in the Dutch North Sea.
Vitol's initial investment in clean energy might seem small, but it is a significant move by a global company that gets a major portion of its profits from handling more than 7 million barrels of crude and petroleum products every day. In 2017, it reported revenues of $181 billion.
“We think wind will become more merchant and will require the application of knowledge and capability in electricity markets,” Hale said.
“We think we can add value, this may take the form of potential long-term power purchase agreements or revenue-stacking models that are familiar to us in our traditional business, but not familiar in wind today.”
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