Culture, Not Conspiracy

Implications: The reasons why Big Oil does not invest significantly (say, 10% or more of their revenues) in solar and wind power is not conspiratorial.  It is more in the cultural makeup of an organization that is used to doing business largely one way (selling a consumable item) versus one that lasts a long time.  This is causing them to miss the bigger picture, of being in the energy business, not just the consumable energy business.

Analysis: The question of why doesn't Big Oil (or Big Coal) or any other Big Energy get into renewable energy in a meaningful way is one that's always hurled at me in conferences and conversations.  The catch phrase "conspiracy" always comes out, often hissed as if the accuser was afraid of being overheard.

Much as it would make my professional life easier and more remunerative if the conspirators can be discovered and neutralized by Agent Jack Bauer, I regret this is not the case.  This is a case of old fashioned corporate culture, where what made you successful may doom you to failure in the inability to change.

The following is based on observation, largely when I worked for a photovoltaic manufacturer that was in partnership with an oil company making solar electric products.  In focusing on wind and solar power, fossil fuel companies should ideally be positioned to take advantage  transition to renewables.  They are used to risk taking, waiting a long time for their return and have large cash reserves to fuel their patience.
 
But they have one major drawback. Big Oil makes money selling products to consumers that are, well, consumed.  Making something that will last decades is not a process they are used to.  BP and ExxonMobil do not make oil rigs, or pipelines, they buy this equipment and use it to extract a consumable product.  It would not be surprising to see BP exit the solar manufacturing business in the near future, as Shell essentially did.  That does not mean they won't be involved, but would revert to being project developers.  They are more comfortable culturally to install 100-300 megawatt scale wind farms (or solar farms) than building their pieces.

Who will be successful in the solar and wind manufacturing industries?  From a cultural perspective, companies that are used to the idea of selling products that last decades to consumers.  For a while, Sharp, Kyocera and GE were the leaders, but they have another problem, which brings up the next success requirement - pure players, companies whose making of solar and wind power systems are of prime importance.  Sharp, Kyocera and GE have been slipping in the photovoltaic market because photovoltaic is still a small percentage of their revenues.  Clean energy is bucked down the corporate bureaucracy to the second or third tier, where requests for capital expansion and serious marketing budgets languish.

At the present, making many different products distracts from emphasizing a few.  So companies like QCells and Suntech grow rapidly on the solar side, and Vesta and REPower on the wind side while the conglomerate giants hem and haw, and lose market share.  Maybe this will change in a decade or so, like auto makers are making the painful transition away from the guzzling lifestyle.  But protests at shareholder meetings are unlikely to have a significant impact, except for distracting window dressing.