Futurology

You’ve heard of Exxon Mobil Corp., Chevron Corp., Shell Plc, BP Plc, TotalEnergies Se, ConocoPhillips and Eni SpA?

How about Tongwei Co., GCL Technology Holdings Ltd., Xinte Energy Co., Longi Green Energy Technology Co., Trina Solar Co., JA Solar Technology Co., and Jinko Solar Co.?

If the former names are familiar giants and the latter obscure, you might want to rethink how you look at the companies that provide the world with energy. On a reasonable accounting of things, the latter are just as significant — if not more so — than the powerhouses of petroleum.

That’s a remarkable shift. Around the middle of the 20th century, the predecessors of the major international oil companies attained such power that they were nicknamed the Seven Sisters, a group of energy producers with such global scope and influence that they could make or break governments. It took a wave of nationalizations and the 1973 oil crisis to end that model. A further disruption is now waiting in the wings, thanks to the unstoppable rise of China’s solar power sector.

The best way to think about this is to consider what oil companies ultimately provide the world. It’s not really crude or natural gas, but the vital ingredient locked up in the chemical bonds of those hydrocarbons: energy.[1] The manufacturers of solar equipment, similarly, aren’t in the final analysis providing us with panels of silicon and glass, but machines that can harvest power from the sun. The activities of each group of companies provide a fresh flow of useful energy to the world every year. And by many measures, the solar companies have already overtaken Big Oil.

To see how, you can start by converting the barrels of crude and cubic meters of gas produced by the big petroleum companies into a measure of energy — exajoules. An exajoule of electricity would be able to power Australia, Italy or Taiwan for a year. And the big oil companies are making a lot of it: About 8.3 EJ annually for ExxonMobil and 6.2 EJ at Shell.

The vast majority of that is wasted, however. Only about a fifth of the chemical energy in freshly pumped crude ends up being turned into kinetic energy moving cars and trucks, because oil refineries and vehicle engines fritter most of it away as useless heat and noise.[2] Gas turbines are a bit more efficient at turning methane into power, but still end up operating at about one-third efficiency once you account for losses from gas well to electrical socket. At a rough estimate, only about a quarter of the energy coming out of an oil company’s wells gets turned into useful power.

We can do a similar transformation with solar. Companies such as Tongwei, GCL or Xinte that produce the polysilicon raw material for solar panels measure their output capacity in metric tons per year. It’s a simple process to convert that into gigawatts of the solar cells made by Longi, Jinko and the like, and ultimately into the exajoules that the resulting panels will generate[3].