In Focus: Power

Shining sun as on/off-switch (icon)

We expect that over this century, the energy system will become increasingly electrified. Around 20% of energy is currently consumed as electricity. And, with a gradual transition towards a lower-carbon energy system, electricity’s role in the energy mix could grow to as much as 50% by 2060. The market shows that this is starting to happen, with battery-electric cars probably the most visible example in Europe and the USA, but also China. However, the pace of this development will differ greatly around the world.

Shell sees opportunities in different parts of the power value chain and sees additional value delivery through the integration of these parts. We will start developing this value chain from the customer-end, as we develop our commercial, industrial and residential power customer base in selected markets. Over time, Shell aims to develop an integrated and significant power business.

Besides the large growth potential, the second reason for our focus on power and new fuels is adjacency to our traditional businesses and the expertise we bring. 

We have well-established regional power trading businesses in North America and Europe, and we are beginning to expand in other areas around the world. During 2017, we started marketing gas in Australia and Mexico, and power in Brazil.

Over the past decade, we have consistently been ranked in the top three wholesale power sellers in the USA and Canada. Currently, we manage more than 10,000 MW of power generation, with more than one-third of that power generated from renewables.

In September 2017, we acquired MP2 Energy, a power-management company that provides market-based solutions for commercial and industrial customers. The acquisition strengthened our position by providing direct access to the large commercial and industrial electricity markets in Texas and the eastern USA. It also gave us scale, market knowledge, and an established customer base from which to expand electricity delivery in the USA and deploy new energy management tools.

We are present in 14 European power markets, including the offtake of renewable power from wind farms and solar parks in the UK and mainland Europe. We also provide wholesale power to independent retail energy providers in the UK and we currently supply electricity directly to industrial and commercial customers in the UK, Germany and Italy.

Within our New Energies business, we are growing our lower-carbon power generation portfolio, focusing on the profitable development of solar and offshore wind projects (see New Energies), complemented by natural gas. We are also building a portfolio of customer-led energy solutions, including supplying energy directly to homes and a portfolio of distributed energy solutions that can increase the reliability and flexibility of the power system.

We are looking into how to best serve an increasing number of electric-vehicle drivers, both on our forecourts and in other locations. We are also supporting a transition to electric vehicles by looking at how charging can be more effectively integrated into power supply and demand networks. (also see New Energies).

Wind turbines at Mount Storm, West Virginia, USA (photo)

Wind turbines at Mount Storm, West Virginia, USA.