Power is the fastest-growing segment of the energy system.
Today, electricity provides around 20% of global final energy consumption and we expect that figure could grow to as much as 50% by 2060.
To help meet this demand, Shell aims to become an integrated power player and grow, over time, a material new business. To achieve this, we will continue to expand our power generation and trading capability and expand our marketing efforts to even more customers.
We are also working to deliver more electricity generated by natural gas and renewable energy, from developing wind and solar projects, to selling electricity generated by renewable sources.
Selling and trading power
We are expanding our business in marketing and selling electricity, including power from renewable sources, in the Americas and Europe. In 2017, our North American gas and power marketing and trading business managed more than 10,500 megawatts (MW) of power generation, with over one-third of that electricity produced by renewables.
In 2017, we acquired Texas electricity group MP2 Energy, which supplies commercial and industrial customers with energy, including wind and solar power. The acquisition gives us direct access to the large commercial and industrial electricity markets in Texas and the eastern USA.
We have started to buy more power from renewable producers. In 2017, we signed agreements to buy more than 200 MW of capacity from wind farms and solar parks in Italy, the Netherlands, the UK and Spain.
We made our first move into supplying electricity directly to homes in February 2018, with the acquisition of First Utility, which provides energy to around 825,000 homes in the UK.
We are exploring potential business models for solar power, including developing power plants.
We are supporting the development of voluntary procurement of power from solar energy. This includes our investment in the Singapore-based Sunseap Group, which has around 160 MW capacity of distributed solar contracts, an electricity retailer licence in Singapore and large-scale solar projects.
Wind and solar power generation
Shell has more than 15 years’ experience in wind power and continues to explore the possibilities of wind-related technologies, including the combination of wind and gas to manage intermittency.
In the USA, Shell WindEnergy has joint ventures (Shell interest 50%) with a Shell share capacity of about 370 MW from 553 wind turbines, as well as one venture in the Netherlands (Shell interest 50%) with a Shell share capacity of 50 MW from 36 wind turbines.
In the Netherlands, we have an interest in the consortium that was awarded the concession by the Dutch government in December 2016 to develop the Borssele III and IV offshore wind farm projects, which are to be located 20 kilometres off the Dutch coast. These two wind farms are designed to have a total maximum capacity of 680 MW, enough to power around 825,000 households. In January 2018, Partners Group signed an agreement to join the projects, diluting our interest in the consortium from 40% to 20%. The final investment decision is yet to be taken on this project.
In 2018, we signed an agreement to acquire a minority interest (43.83%) in Silicon Ranch Corporation, a US developer, owner and operator of around 900 MW capacity of operational or contracted solar projects.
We also plan to grow the part of our business that provides energy to those who have insufficient access to it today. This will typically involve renewable power combined with storage and other sources of energy.
In this area, Shell has invested in the following companies:
- SolarNow, a Dutch company that provides rooftop solar energy modules to off-grid households and entrepreneurs in East Africa. SolarNow has 47 branches in Uganda and five in Kenya.
- SteamaCo, a UK-based company that sells off-grid smart metering technology to companies developing mini-grids in Africa, Asia and Latin America.