Shell already spends up to 2 billion a year on low carbon energy and is looking to increase this to $4 billion a year, with a move to look to a future beyond oil and gas.
Maaten Wetselaar the new head of the Gas & New Energy Units which already generate a third of the company’s revenue said he wants to increase the company’s investment in low carbon energy.
In an interview with the Guardian, he stated “I would like my current business to be financially credible enough for not only the company but shareholders, to want to double it and look at more’.
Shell is following in the trail of other Oil Majors such as British Petroleum which changed its name to BP (Beyond Petroleum)
Norway’s state oil company has rebranded as Equinor to reflect its move towards becoming a “broad energy company”, France’s Total has gone big on batteries, and BP has returned to solar six years after exiting the sector.
Shell is considered an industry leader on the switch, having invested in gas, solar firms and electric car infrastructure companies. But critics have said it must move faster.
The renewed push by oil majors into green energy from traditional fuel is large because of stronger government action on global warming.
Wetselaar stated that the company’s aspiration to move into electricity generation begun with an acquisition of the firm First Utility one of the UK biggest energy suppliers last year.
He stated “There is no global provider of power in the world. And there is no global brand of power in the world. We provide energy globally and we have a global brand,”
The executive denied the firm’s history as a fossil fuel producer would hinder its efforts to persuade people to buy clean power from it, saying company research showed people would buy electricity from it. “A trusted energy brand apparently travels, from fuels into power,” he said.
But he said the firm was committed to the new technology. “From a Shell perspective, we are very keen to win more in this game. In the North Sea but also offshore North America. And we’re even looking at China, India, Taiwan, and Japan’.
Buying up clean energy firms would be essential if Shell’s power business was to be on a par with its oil and gas business in the 2020s, he said. But he vowed to avoid acquiring traditional utilities that might become irrelevant in a world of decentralized energy.
“What I don’t want to buy is a huge old utility with outdated IT systems and a huge workforce that is still in the old ways of working.”
Wetselaar acknowledged Shell had failed to make serious inroads on wind power, admitting it had lost out on as many as nine windfarm projects when competing in auctions for government subsidies. Until the two it won in the US this month, it had only one in the Netherlands.
Other oil majors will follow Shell’s lead in recently tying executive pay to the company’s targets on cutting carbon emissions, he predicted. But he said it would be a mistake to limit oil firms’ carbon targets to their own operations and exclude emissions from the fuel burned by their customers, in a veiled barb at BP.
He further stated that Shell would defend such legal challenges, which he viewed as a distraction that could pit regulators against companies and slow down the energy transition. “I see it as a waste of resource at both ends,” he said.
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