In a thought-provoking analysis, Bloomberg contributor David Fickling challenges conventional wisdom about the energy sector, asserting that the seven largest solar companies have already surpassed the seven largest oil and gas companies in terms of total energy production.
This revelation might surprise even those closely following the renewable energy sector, prompting a closer look at the data and methodology behind this claim.
Redefining Energy Production: A Focus on Usable Output
Fickling’s argument hinges on the distinction between energy production and usable energy output.
While oil companies primarily produce crude oil and natural gas, their true product is the energy contained within these hydrocarbons.
Similarly, solar companies don’t merely manufacture panels; they produce machines that harness the sun’s power. By focusing on the actual usable energy delivered to society, Fickling reveals a surprising shift in the energy landscape.
Measuring Energy: The Exajoule as a Common Unit
To compare energy production across different sources, Fickling uses the exajoule (EJ) as a unit of measurement.
One EJ represents an immense amount of energy, equivalent to the annual electricity consumption of a large country like Australia.
By analyzing the exajoule output of both the “Seven Sisters” of oil and the leading Chinese solar companies, Fickling uncovers a significant disparity in energy efficiency.
The Efficiency Factor: Solar’s Advantage
Oil and gas production involves substantial energy losses due to refining processes and the inherent inefficiency of combustion engines.
A significant portion of the energy contained in fossil fuels is simply dissipated as waste heat. Solar energy, on the other hand, is directly converted into electricity, minimizing energy losses and increasing overall efficiency.
This efficiency advantage allows solar companies to produce more usable energy per unit of installed capacity compared to oil companies.
China’s Solar Giants: Leading the Global Energy Transition
Fickling’s analysis underscores the rise of Chinese solar companies as major players in the global energy market.
Companies like Tongwei, GCL Technology Holdings, and others are not only expanding their production capacities but also outperforming some of the largest oil companies in terms of usable energy output.
This dominance in solar technology positions China at the forefront of the global energy transition.
Long-Term Energy Security: Solar’s Sustainable Advantage
Beyond current production levels, solar energy holds a significant advantage in terms of long-term energy security.
Unlike finite fossil fuel reserves, solar energy relies on a virtually inexhaustible resource – the sun. Solar farms and installations have a lifespan of decades, ensuring a continuous and reliable source of energy for the foreseeable future.
This sustainability aspect further strengthens solar’s position in the global energy mix.
The Geopolitical Landscape: Shifting Power Dynamics
The implications of solar’s ascendance extend beyond the energy sector. Fickling draws parallels between the rise of coal and oil in previous eras and the current dominance of Chinese solar companies.
He suggests that control over critical energy resources has historically been a major driver of geopolitical power.
As solar becomes increasingly central to the global energy system, the balance of power could shift in favor of countries leading in solar technology and production.