From Wells to Windmills: Resource Redeployment and New Technology Investment in the Energy Sector

Research summary: this study examines how multi-business firms redeploy resources following an industry shock. Using the case of oil and gas firms diversified into wind power, the author shows that firms reduced expenditure in oil and gas—particularly on complex offshore projects—while increasing investment in wind after the 2014 oil price crash. These investments tended to involve newer, more powerful technologies (turbines) when co-located with existing offshore oil and gas assets. The study provides detailed empirical evidence of resource redeployment and documents conditions under which firms shifted away from one industry and pursued more demanding projects in another. The findings underscore the role of asset colocation in shaping redeployment patterns. They also highlight that market-based inducements may not be sufficient in driving the energy transition.