As the concept of "AI's future lies in electricity" gains traction, energy is once again becoming the "golden track" for capital markets. However, this time, the true industry leaders may no longer be the old Western oil giants.
If we compare traditional oil companies with emerging renewable energy companies, which side will have a greater influence in the future?
David Fickling, a renowned columnist focused on climate change and energy issues, points out in his latest research that the best way to approach this issue is to consider what oil companies ultimately provide to the world. The answer is not their products — crude oil or natural gas — but the essential component of the chemical bonds in these hydrocarbons: energy. Similarly, what solar equipment manufacturers ultimately provide is not silicon wafers, but machines that can harness energy from the sun.
Both groups, traditional energy companies and new energy companies, provide the world with new and useful energy every year. However, in many respects, photovoltaic companies have already surpassed large oil companies.
To understand this comparison, one can convert the production of each barrel of crude oil or cubic meter of natural gas by large oil companies into a unit of energy measurement — exajoules. One exajoule of electricity can power a country like Australia or Italy for a year. Large oil companies are producing significant amounts of this energy: ExxonMobil produces approximately 8.3 exajoules annually, while Shell produces around 6.2 exajoules per year.
When comparing the energy production of these two groups of companies, the results are astonishing. Based on annual useful energy output, the largest polysilicon producer, Tongwei Co., can already compete head-on with some of the largest Western oil companies like BP, Eni, and ConocoPhillips, while other solar panel manufacturers are not far behind. If Tongwei continues with its plan announced in December 2023 to build a 400,000-ton high-purity silicon project and supporting facilities, nearly doubling its current production, it could even surpass ExxonMobil, the "big brother" of the Western oil industry.
Typically, an oil company's reserves can sustain production for about a decade. Similarly, polysilicon or photovoltaic manufacturers can produce products year after year once a factory is built, until the equipment wears out or becomes obsolete. If we compare the geological reserves of oil companies with the products that solar companies can produce before equipment depreciation, clean energy is clearly in the lead.
This comparison also overlooks a crucial factor. The solar panels sold by Longi in 2024 can generate electricity for decades afterward — most solar panels have a warranty period of up to 25 years. In contrast, the oil and gas extracted by traditional energy companies this year will be completely consumed within a few months. The long-term energy support provided by producing a single solar panel is actually several times that of the oil extracted by large oil companies.
Since the first industrial revolution, which led to the rise of coal-rich countries like the UK, Germany, and the US, nations controlling the upstream of energy have dominated each century. In the latter half of the 20th century, the rise of crude oil brought power and wealth to Russia and the Middle East, while also extending the global dominance of the US. Today, the influence of China's "Seven New Energy Sons" in the 21st-century energy system may already surpass that of the "Seven Sisters of Western Oil" that dominated the 20th century.
What does this signify? The implications may already be self-evident.