France-based Total S.A. is one of the elite seven “supermajor” oil companies in the world. When people talk about “Big Oil,” Total is exactly the kind of corporation they’re talking about. They have an aggressive vertical strategy, with businesses in every part of the fossil fuel world, from crude oil and natural gas exploration and production all the way down to the marketing of petroleum products. One would think that the company's primary goal would be to do everything they can to continue the reign of oil in perpetuity, and yet, on Total’s website, the casual visitor can find this statement:

“For Total, contributing to the development of renewable energies is as much a strategic choice as an industrial responsibility. We are doing our part to diversify the global energy mix by investing in renewables, with a strategic focus on solar energy and bioenergies.”

Total is leading what looks to be a wave of giant oil companies investing in the competition. Last year they spent nearly €1bn on buying a battery manufacturer, a move that Total chairman and chief executive Patrick Pouyanné said would “allow us to complement our portfolio with electricity storage solutions, a key component of the future growth of renewable energy”.

While it’s not the only oil giant making a move toward alternative energies, some industry experts say Total is the only one taking renewables seriously. Greg Mutitt of Oil Change International said about the company, “It has ambitious plans. For BP and Shell, renewables are nice for PR, but they are not doing anything significant on it.” As it stands, Total’s gas and renewable power division, which includes solar, biofuels and batteries, has 13,000 employees and represented $4.7bn of capital expenditure in 2016.

In the current market, wind and solar are still too small to replace traditional energy at just 4 percent of the market share of oil and gas, but that won’t be the case for long. “Wind and solar are poised to radically reshape energy markets and the growth opportunity in renewables cannot be ignored” a recent study by Wood Mackenzie’s study states. “The Majors are leading the way in shaping strategies as they look to capture a piece of the action in this fast-growing market.”

Despite the forward-thinking investments of Total and similar expenditures by Shell and BP, there are still some major players, including ExxonMobil and Chevron, who have yet to be convinced. A major deterring factor has been the comparatively high cost of renewable production. However, in the past few years, this too has seen some major changes.

Renewable energy production costs have come down markedly and will continue to come down as production technologies steadily improve. Solar alone is nearly half as expensive as it was just 5 years ago, and the solar market has skyrocketed accordingly. Solar now employs 3.1 million people worldwide, a striking 12 percent increase since 2015. In the U.S. alone, last year’s numbers show that solar employment expanded at 17 times the rate of the nation’s total economy.

In order keep up with the changing tides, Big Oil will have to follow the footsteps of Total and start to invest heavily and quickly. Wood Mackenzie suggests that if big oil invests $350 billion in solar panels and wind turbines will bring renewable output to just 6.5 percent of their current energy production.

Part of Total’s distinction as the most forward-thinking of its contemporaries is that fact that France is politically a much safer bet for renewables than the U.S., home to a large portion of the oil industry. The Trump administration’s disregard for the Paris climate accords and plans to recall the Obama-era Clean Power Plan threaten to push renewable energy investors away from the U.S.

While there are many valid reasons for investors to hesitate before pouring large sums of money into wind and solar, they’re simply outweighed by the threat of being left behind by a rapidly changing market. The currently glut in oil and gas are not doing the big oil any favors, and as global policies continue to shift away from oil addiction and toward renewable incentives, the demand for fossil fuels is likely to stagnate. Meanwhile, for wind and solar, it seems clear that there is nothing but clear skies ahead, and Total will be ready.

By Haley Zaremba for Oilprice.com