Large oil companies, such as Shell, Exxon Mobil and Chevron, are beginning to invest in energy-technology startups, signaling a change in business strategies for key players in the industry. Investments have been made in areas from wind and solar power to biofuels and electricity grid improvements. As of now, the investments are small compared to the $7.5 billion investment into the clean energy sector by VC and private equity firms in 2016; however, the move signals the possibility of new revenue streams that may grow into a major source of profit for oil companies, as governments around the world tackle climate change by limiting the production and usage of fossil fuels.

Many key oil companies have changed their strategies to include investments in clean energy. Royal Dutch Shell spends 50% of its budget on clean energy, with the figure forecast to jump to 60% in the coming years, and has invested in companies such as Kite Power Systems and Glasspoint Solar. Total Energy Ventures International has invested $160 million to date in clean energy, with 75% of the investments in North America, and has invested in clean energy firms such as AutoGrid and Off Grid Electric. BP Ventures similarly has invested $325 million to date, focusing most of its investments on the chemicals and fuels sectors, and backing companies such as Tricoya Technologies, Fulcrum and Solidia.

Exxon has taken a different approach, leaning towards internal and collaborative clean energy R&D as opposed to buying minority stakes in startup firms, like other companies. The oil giant is working with Synthetic Genomics and FuelCell Energy, and focusing on biofuels, carbon capture and storage, and energy-efficiency and -savings. Chevron has invested in alternative energy through its backing of companies such as Acumentrics and Ensyn, and Statoil Energy Ventures has invested $20 million since February in renewable energy startups like ChargePoint and Oxford Photovoltaics.

Source: Bloomberg