Renewable Energy vs Oil and Gas: Competition or Collaboration?

Introduction

The global energy industry is undergoing a major transformation. Renewable energy technologies such as solar, wind, hydropower and geothermal power are expanding rapidly, while oil and natural gas continue to play important roles in transportation, industry, electricity generation and petrochemical production.

This raises an important question: Are renewable energy and oil and gas competitors, or can they work together to create a more reliable and sustainable energy system?

The evidence increasingly points toward a combination of competition and collaboration. Different energy sources compete for investment, customers and market share, but they can also complement one another through infrastructure, technology, financing and expertise.

Explore how renewable energy and oil and gas can compete and collaborate, highlighting the energy transition, emerging technologies, and opportunities for a sustainable energy future in Nigeria.

The Growing Importance of Renewable Energy

Renewable energy has become one of the fastest-growing parts of the global energy system. According to the International Energy Agency (IEA), renewable energy accounted for the largest share of the increase in global energy supply in 2024. In 2025, solar PV became the single largest contributor to growth in global energy supply.

Solar and wind power are particularly important because their operating costs can be low once facilities are constructed, while continued technological development is improving efficiency and energy storage.

The expansion of renewables is being driven by several factors:

•  Growing electricity demand
•  Falling costs of solar and wind technologies in many markets
•  Energy-security concerns
•  Climate and emissions policies
• Technological improvements in batteries and power systems
• Increasing electrification of transportation and industry

The Continuing Role of Oil and Gas

Despite the growth of renewables, oil and gas have not disappeared from the global energy system. The IEA reported that demand for oil, natural gas and coal all increased in 2025, although at different rates.

Oil remains important for transportation, aviation, shipping and petrochemical manufacturing. Petroleum products are also used in the production of plastics, chemicals, lubricants and numerous industrial materials.

Where Renewable Energy and Oil and Gas Compete, There are areas where the two sectors clearly compete.

1. Electricity Generation

Solar, wind and other renewable technologies increasingly compete with gas- and oil-fired power generation.

Natural gas has a different role from oil. It is widely used for electricity generation, heating and industrial processes, while LNG allows gas to be transported between markets.

This means that the energy transition is not simply a matter of replacing every existing energy source immediately. Different regions have different energy needs, infrastructure and resource availability.

The IEA reported that global renewable generation virtually matched coal-fired generation in 2025, while oil-fired electricity generation declined by around 1.5%.

2. Transportation

Electric vehicles are reducing demand for some conventional road fuels. At the same time, oil remains important for aviation, shipping and other applications where electrification is more difficult.

Where Collaboration Is Possible

Competition does not mean that the two industries must operate separately. There are several areas where their capabilities can complement each other.

1. Existing Infrastructure

Oil and gas companies possess extensive experience in engineering, project management, logistics, large-scale construction and energy infrastructure.

These capabilities can be applied to renewable projects such as offshore wind, solar developments, hydrogen facilities and carbon-management projects.

2. Offshore Energy

Offshore oil and gas companies have experience with marine engineering, subsea systems, floating structures, pipelines and offshore logistics.

Some of these capabilities can be adapted for offshore renewable-energy projects.

Where Collaboration Is Possible

Competition does not mean that the two industries must operate separately. There are several areas where their capabilities can complement each other.

1. Existing Infrastructure

Oil and gas companies possess extensive experience in engineering, project management, logistics, large-scale construction and energy infrastructure.

These capabilities can be applied to renewable projects such as offshore wind, solar developments, hydrogen facilities and carbon-management projects.

2. Offshore Energy

Offshore oil and gas companies have experience with marine engineering, subsea systems, floating structures, pipelines and offshore logistics.

Some of these capabilities can be adapted for offshore renewable-energy projects.

3. Natural Gas and Renewable Power

Natural gas-fired power plants can provide electricity when renewable generation is unavailable because of weather conditions or insufficient storage.

This does not eliminate the environmental considerations associated with gas, but it illustrates how different energy sources can interact within an electricity system.

4. Hydrogen and Low-Carbon Fuels

Oil and gas companies are also participating in hydrogen and other low-emissions fuel projects.

Their existing expertise in gas processing, pipelines, industrial facilities and large-scale project development can potentially support these emerging industries.

5. Carbon Management

Carbon capture, utilization and storage (CCUS) is another area where oil and gas expertise can be relevant. The industry has long-standing experience with underground geology, drilling and injection technologies.

What This Means for Nigeria

For Nigeria, the relationship between renewable energy and oil and gas is particularly important.

Nigeria has substantial oil and natural gas resources but also faces significant electricity-access, infrastructure and reliability challenges. Renewable technologies particularly solar can provide opportunities for distributed electricity generation, mini-grids and off-grid systems.

At the same time, oil and gas remain important to government revenues, exports, industrial activity and domestic energy supply.

A practical energy strategy can therefore involve multiple energy sources rather than relying exclusively on one technology.

For example, renewable energy can expand electricity access in underserved communities, while natural gas can support industrial and power-generation requirements. Oil and gas companies can also diversify into renewable projects, energy services and other emerging technologies.

Competition and Collaboration Can Coexist

Renewable energy and oil and gas should not necessarily be viewed as two completely separate worlds. They compete in some markets while complementing each other in others.

The global energy system is becoming increasingly diverse. The IEA’s 2026 review found that all major energy fuels and technologies expanded in 2025, although at significantly different rates.

For businesses, governments and investors, the central issue is therefore not simply “renewables versus oil and gas.” It is how different energy sources, technologies and infrastructure can contribute to affordable, reliable and increasingly lower-emissions energy systems.