KUALA LUMPUR (April 15): Capital spending on renewable energy is expected to increase 8.5% year-on-year (y-o-y) to US$243 billion in 2021 from US$224 billion in 2020.

According to research data analysed and published by online trading portal Comprar Acciones on Wednesday, the oil and gas (O&G) capital expenditure (capex) will grow by only 1.6%, going from US$306 billion in 2020 to US$311 billion this year.

For some context, companies in the sector spent US$422 billion in 2019, compared with only US$177 billion for renewables.

The portal said as a result of these trends, spending on renewable energy projects this year will be only 22% lower than that on O&G.

It said during the year, onshore wind projects will account for the bulk of spending.

From around US$94 billion in 2020, these are projected to hit US$100 billion in 2021.

On the other hand, spending on solar energy projects will rise from US$88 billion to US$96 billion.

Meanwhile, offshore wind projects will have the lowest capex, going from US$43 billion to US$46 billion.

The portal said in the period between 2019 and 2021, spending on upstream O&G has declined by a compound annual growth rate of 15%.

In 2020, businesses in the sector had to find ways to reduce exposure due to risky market conditions.

Citing Norway-based independent energy research and business intelligence company Rystad Energy, Comprar Acciones said that based on revenue data from 170 listed companies, businesses focused on O&G suffered a 23% y-o-y revenue drop.

In contrast, it said those focused on wind and solar energy grew sales by 18%.

It said that for Saudi Aramco, the world's largest oil company, there was a y-o-y decline of 44.4% in 2020 full-year earnings.

However, despite this massive drop, the company still made a profit of US$49 billion.