The energy industry is increasingly focused on growing low-carbon businesses, spurring veteran bankers to become advisers on mergers and acquisitions in renewables.  

Clean energy and net-zero emissions have created a transition dilemma for banks too. Others have moved from oil and gas to working with customers on smaller-scale renewables deals.

Despite the massive jump in clean energy deals in the past few years, they are still only a fraction of the oil and gas mega-deals. 

According to bankers, growing ESG and net-zero emissions trends will give bankers more work in renewables in the coming decades, while the scope and field of work in fossil fuels will shrink.

RBC Capital Markets Managing Director and Head, EMEA Energy Transition Ralph Ibendahl said that traditional oil and gas fields would inevitably narrow over time as net-zero approaches.

Growing demand for renewable energy

Ibendahl continued, "If you're a renewables banker, you'll be busy for the next thirty years or more."

Europe has seen increased solar and wind installations in recent years, and renewable energy overtook electricity generated from fossil fuels in the EU for the first time in 2020. However, clean energy still needs to be installed in significant amounts, Ibendahl said at the time.

He noted that it may be necessary to quadruple Europe's renewable capacity additions by 2050 compared to what has been installed in the last decade.

The future of renewable energy will be shaped by many capitals, private investment, and the acquisitions of startups. To reach net-zero emissions, clean energy investments must at least triple.

Reuters reports that mergers and acquisitions in the renewables sector increased 11 times last year compared to five years ago.

Last year, the value of all oil and gas deals in the world was ten times higher than renewables deals. The data showed that the oil and gas deals totaled $290 billion, ten times more than the value of renewables.

Citi And JP Morgan Top Oil, Gas Financial Advisors

According to GlobalData's Financial Deals Database, JP Morgan and Citi were the top oil and gas M&A financial advisers both by value and volume in January. JP Morgan's deal value was $81.3 billion among all advisers tracked. Citi led the list of deal volumes with 30 deals valued at $54.2 billion.

Following Citi in volume terms were RBC Capital Markets, JP Morgan, Jefferies, and Perella Weinberg Partners.

Big Oil increases its clean energy deals

The value of deals in oil and gas still outweighs the value of sales in renewables. Still, many bankers are gearing up for huge investments and more discounts in low-carbon energy, including those undertaken by big oil companies.  

Although most of their development dollars remain focused on conventional energy, the big oil and gas companies spend most of their time considering the transition.

According to FTI Consulting in its report on U.S. renewable energy mergers and acquisitions for 2022, strategic and financial players, such as utilities and investment funds, continue to lead deal activity in the renewables sector. Still, others such as oil and gas majors, insurance companies, pension funds and sovereign wealth funds are entering on an accelerated basis.

'We're seeing a strategic shift by energy giants to allocate more capital to renewable and clean energy technologies, demonstrated by landmark announcements of sustainability and clean energy commitments, and the building-out and acquisition of low-carbon assets and companies,' says FTI Consulting.  

Shell purchased Savion LLC, a utility-scale solar and energy storage developer in the United States. BP acquired AMPLY Power, which provides charging for electric vehicles in the United States.