Clean Power

Published on September 30th, 2015 | by James Ayre


Shell CEO: Solar Energy To Be Backbone Of World’s Energy System

September 30th, 2015 by  

Solar energy will comprise the backbone of the world’s energy system in years to come, according to the CEO of Shell (yes, that Shell), Ben van Beurden.

The exact words used by Van Beurden were that he has “no hesitation to predict that in years to come solar will be the dominant backbone of our energy system, certainly of the electricity system.” Considering that these words were from the CEO of one of the largest oil companies in the world, one would assume that he has good reasons for saying what he did.

Notably, this matches well some energy forecasts put out by Shell a couple of years ago.

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The very interesting remarks came during an interview that the Shell CEO gave to BBC Radio 4. During the interview he also restated his opinion, though, that global energy demand will somehow double within the next few decades, and that fossil fuel use will continue to rise for several more decades — something that I’m extremely skeptical of. So perhaps we should take his comments with an extra grain of salt. 🙂

Commenting on oil exploration in the Arctic by the company, and criticism over that, Van Beurden, commented: “It is a very, very volatile business in terms of supply and demand. The oil price responds to very small mismatches between supply and demand.”

Interestingly, he also stated, when asked when he thought oil prices would “recover,” that the “honest answer to that is I don’t know.”

Considering that current oil prices don’t allow for expensive Arctic drilling and exploration, it looks like that part of the company’s business will be on hold for the time being. You can count me as skeptical, though, that most Arctic fossil fuel reserves won’t end up being extracted over the longer term — there seems likely to be a fair amount conflict over that issue, as well, with many Arctic countries already forming themselves into blocs with the intent to exert greater influence in the region than would otherwise be possible.


Shell’s Arctic Departure Is A Sign Of The End Of The Oil Age

Shell Bullish On Solar Despite Dropping Solar (But Much More In Its New Scenarios Than That)

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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

  • Sam

    With Cold Fusion one liter of water is enough to power one family for 200 years. These devices needs some energy to start going, and in that sense I would agree with Ben that the Solar Tech could be the “backbone”.

    You could also take a Solar Panel, invert it towards the glow discharge / plasma of a CF reactor and produce electricity 24/7.

    But in all honesty I doubt this is what Ben is referring to. For solar, to rise of the market, things have suddenly become tougher, as the price of fossil fuel has plummeted. I hope people can see beyond price and continue to develop the cheaper and more sustainable alternative!

    • Bob_Wallace

      I see no signs that the dropping price of coal is slowing solar uptake. And, do remember, there are factors driving the world toward renewable energy in addition to short term cost savings.

      As for fusion, too uncertain, too far off in the distance even if we do figure it out in the next ten years. We’ve got to get rid of a huge part of our fossil fuel use in the next two decades.

  • NRG4All

    Shell seems to be a little bit different regarding their ethics. The reason I say that is that John Hofmeister, former President of Shell North America wrote an interesting book, “Why We Hate the Oil Companies”. In it he too, indicates that in the long run we have to move to renewable sources of energy, at least for electrical generation. He bemoans the fact that the U.S. energy policy is a political football that gets tossed around with each Administration. He advocates a sane and unwavering energy policy that companies, and the country can count on as we move to renewables.

  • Lou

    First, I love this site. Very inpiring. It is one of the news sources that makes me look to the future with hope and it restores my faith in the human spirit.
    I believe Shell CEO is being overly optimistic…he gets paid to be so. Oil prices will probably spike a little but will remain below $60/barrel for ever…so long as electric cars hit the tipping point in 2018. I’m predicting 2018 will be the first bumper (no pun intended) year for electrics. This will be the first year with 200mile range at reasonable price ($25K after rebates). If this happens, bye bye oil, hello renable. By this time I’m also predicting massive transition in utilities. By 2021 the true tip point will happen. By 2025 80% of new car sales will be electric. No one will want gas.
    But then again…this is the future I want…

  • Richard Poore

    If Shell really believes solar energy will be the backbone of the future energy system, they should be putting money into solar. The oil companies have acquired a great deal of power and money from petroleum, plowing that back into solar might be due justice.

    • Bob_Wallace

      I’m wondering why. Why should an oil company transform itself into a totally different type of company just to keep the name alive?

      (I’m playing with an idea I just had, it may go nowhere…. ;o)

      There’s nothing an oil company does that applies to a solar panel manufacturing or installing company. There’s no “We can take our equipment/specialized knowledge over to XYZ and grab a hunk of that market”.

      If you can see that your oil company is going to go out of business sometime in the future wouldn’t it make sense to just prolong the revenue stream as long as possible? Cut development that isn’t highly likely to increase revenue (pull out of the Arctic). Do what you can to keep sales as high as possible. Ride the income stream until it drys up and sell off any remaining assets.

      If you’ve got investment in the company then you might want to divest (depending on the dividend stream). If you expect to keep working after the oil company expires then you might want to change companies and get into something with a longer future.

      • Richard Poore

        That would be one possible model. If Shell sees itself solely as an oil company.

        If Shell sees itself as an energy company however, it may see itself as following the IBM model. IBM didn’t start out making computers, it did however make complex machines.

        Even tho some of us have been interested in solar for decades, the solar market is still in its early stages. Production of solar energy is growing, but its long term look has yet to be decided. Is solar going to be dominated by individual solar installations on every home owners roof? Is solar going to be dominated by large commercial solar fields? Is there going to be a mix? And if a mix what is going to be the ratio?

        Why would Shell get into solar? Why not? It has the capital, it has experience with distribution stations all across the country. It apparently has a CEO who thinks solar is going to be a huge field.

        Solar expansion is going to take a lot of money, if Shell wants to stop drilling for oil and instead invest in solar…seems like a better use of their time.

        • Richard Alan

          But can Shell deliver anything other existing competitors can’t? The solar market’s already crowded with players. For every IBM example, there’s a company that failed or generated little revenue in a new market.

          • Richard Poore

            The main thing they have going for them is an existing solid revenue stream. They can self finance to whatever extent they want.

            Shell also has a huge existing base of service stations. They have locations that are already optimized for access for vehicles, ideal for setting up charging stations across the US.

            A lot of people buy gas from Shell stations, they are a familiar sight. Shell is extremely well known, if they can translate from an oil company to an energy company they have a tremendous stock of consumer recognition built up.

            Also, if their CEO is being genuine here, they may see a real need to change the nature of their company.

            A large part would come down to whether they are an energy company or only an oil company.

          • Richard Alan

            But what are you proposing? That they become a utility company? An EV charging company?

            If they’re trying to be a utility company, their Shell service stations don’t help them. They’d be competing with not only the established utility companies and the current renewable energy providers.

            If they’re an EV charging station they are essentially a middle man between the grid and the public. Supplying petrol/diesel requires a service station because of the safety risks and the short time required to refuel. The EV chargers I’ve seen here in the UK have been in car parks, public and commercial (unattended). It will be a canny move for increasing foot traffic in your supermarket/store/shopping mall. There is no need for a middleman service station between the utility company/EV propriety designer/car park owner.

            If I was a Shell share-holder/board member I’d want maximised revenue for the short to medium term, as opposed to risky long-term investment in new markets. If I wanted to invest in renewable energy I could take my share dividends and invest them in SolarCity/Tesla etc who already have market share and experience.

            I mean if Shell wanted to go into deep-sea mining or geothermal or carbon capture or synthesised plastics that would be more relevant to what they currently do.

          • Bob_Wallace

            “It will be a canny move for increasing foot traffic in your supermarket/store/shopping mall.”


            Imagine a grocery store installing a bunch of Supercharger speed chargers. 170 miles in 30 minutes.

            People who don’t have a place to charge when they park could plug in and charge while they do their grocery shopping.

            13,000 miles a year? Three charges every two weeks.

            $18,000 for a charging bay? Assume 12 charges per day. Charge $1 more than the cost of the electricity and the bay would be paid off in 4 years. $7 per charge at $0.12/kWh. And the grocery probably gets electricity at a lower than retail rates.

            I don’t see oil companies or filling stations getting into the charging business.

            It’s going to be retail stores looking to attract customers and/or utility companies interested in market growth.

          • Richard Poore

            At the moment EV is a niche market in the US. There need to be two changes to make the EV market grow here, to give electric a chance to replace oil.

            Longer range lower priced vehicles are a must. Tesla is showing that longer range is possible, with future improvements we can hope the market will produce more range in a somewhat lower price range.

            The other half of the problem is a lack of places to quickly charge.

            More and more service stations in the US have changed how they make money. Currently the sale of gasoline is largely a break even proposition for the stations. Their real profits come from the sale of other items. Its why so many stations have grown into mini markets, many adding food services as well.

            Moving from gas to electric charging would fit in perfectly with the current profit model.

            Shell board members who truly believe electric will replace gasoline would have two choices:

            1) Prepare to gradually close down the company as oil is phased out.

            2) Move into the new market and use their assets to develop the market much more quickly than less well capitalized competitors.

            The one big advantage gas stations would have is they already are spaced along the major highways in easy to access locations, with easy access for vehicles. For long distance travel in the US to change to EV, charging stations need to sprout up in similar locations….

          • Bob_Wallace

            Perhaps. But I think it more likely that we’ll see rapid charging popping up at restaurants along the travel routes. They already have the parking spaces.

            Many gas stations are space limited, especially when one considers that people charging are likely to be in place for 20-30 minutes.

            Half hour parkers would be a big gain for restaurants but not so much so for gas stations. And I’m not sure many EV drivers would really want to stop a gas station.

          • Richard Poore

            Agree 100% that restaurants would tie in well, the timing might be a bit of a problem since meals tend to run longer than 20-30 minutes so the chargers wouldnt be optimally utilized.

            The bigger problem would be what restaurants would want to take the plunge?

            While eventually chargers at restaurants may become common place, its certainly not anything a chain is considering.
            There is no pressure on any restaurant to enter the energy market, so it would take a bit of a leap of thought for them to go from food to energy as a market.
            To make much of an impact would take dedication from a large chain willing to invest heavily in a new market.

            Just thinking about changing the franchise agreements for any of the chains…wow.

            Mainly I like the idea of any of the oil companies getting into electric because it would drastically speed up the process. Restaurants, food marts etc would all work well, but likely add decades to the process.

          • Bob_Wallace

            What restaurants? Any restaurants that want business. As we move to EVs would you stop at a gas station to charge and then go to a restaurant to eat or would you prefer to go to a restaurant that had food you liked and offered you a place to charge at the same time?

            Right now Tesla is providing the charge points, the SC bays. GM is starting to make noises about rapid charging being important. If GM wants to sell longer range EVs they will need a place to charge. Utilities are starting to understand that EV charging is a new market that they can help develop.

            OK, but what if Tesla, GM and utility companies don’t do any of the installing?

            If I’ve got the number correct a SC bay costs $18k. Serve 12 customers a day. That’s 4,380 a year. Charge each customer $1 plus the cost of electricity and the charger is paid off in four years, which is a 18% return on investment.

            Or decide it’s worth $1 to get a customer in the door for a half hour and charge them only the cost of electricity.

            Pressure to install? Burger King installs some rapid chargers. McDonald’s and Taco Bell see cars charging and drivers going inside to purchase food.
            Pressure applied.

            Some restaurants (Cracker Barrel) and coffee shops (Starbucks) have already installed level 2 chargers. And do not charge for the electricity.

          • Richard Poore

            The problem most restaurants will have is that restaurants are a franchise setup. Individual restaurants could set up charging stations, but it would require a major change for all of a chain to build charging stations.

            Cracker Barrel has a few stations in TN, and plans to have different type of stations at 4 locations in TX upcoming, Star Bucks has a charging station at a WA location…more elsewhere maybe?

            Its going to be hit and miss, more locations gradually added as more EV are sold in a local area.

            Sort of a slow drip drip drip build up.

            It will happen, its just going to take a very long time at this rate.

          • Bob_Wallace

            Let’s look once more at the rate of technology shifts.

            They start slow and then accelerate….

          • Richard Poore

            Look closely at those lines. The steeper, faster growing lines are for techs that are new. The lines for the internet, AC, computers and the VCR show quick shifts.

            The lines for the dish washer, the clothes dryer and even the telephone are much slower. Sixty years for just over a 60% rate for the dishwasher.

            All I’m saying is that anything that can make EV acceptance and growth look more like the internet rather than the dishwasher would be a good thing.

            There is a huge established base of oil vehicles as well as there being a huge established base of fueling stations for those vehicles.

            If Shell (for instance) would decide to install charging stations in a 1000 locations across the US how is that a bad thing?

          • Bob_Wallace

            Would it be bad if Shell got into the supercharger business?

            Probably not. If they didn’t do it right they’d fail since there are alternatives.

            Is it likely that Shell will get into the supercharger business? I can’t see that likely, nor can a I see any signs that they are considering it.

    • newnodm

      They should put their money into geothermal. They are the experts at what is underground and how to get at it.

      • Foersom

        Indeed, it is likely that the fracking-gas industry eventually will move on to geothermal.

        • Martin

          Yes a lot more sustainable jobs and more sustainable for our environment as well, geothermal!

  • I hate to burst Shell’s CEO’s bubble, but we didn’t wait for them to make up their minds as to whether or not they will make a profit switching to non-polluting energy. Nice of you to wake up, sorry you’re so late to e party and still carry that very ugly polluting image.

    I should write them a letter saying something like: “Thank you for waking up and joining the group. Sorry you’re so late to the party. Hopefully this time, your words are more than just that, hot air. Surely after all these decades of subsidies and holding me ransom at the pump, I’m intrigued as to how you will join this new trend all so so foreign to your bottom number dwelling tactics and ROI infested MBA mentality” or something like that.

    Anyway, the gist is action and less words. We have plenty of words and promises, we need action and a show of good faith.

    • Lou

      I agree. They along with GM will go the way of the…

      • I’m noticing more and more how these big companies that slowed down innovations previously are now making the loudest marketing hoopla. Maybe they don’t know no one waited for them and that most of us have already moved on. I truly feel these big faceless mega corporations haven’t caught on to it that it’s over. There is no more trust. It’s now time to turn our attention to the smaller more nimbler companies making a true difference outside deep marketing pockets.

  • Bob_Wallace

    “global energy demand will somehow double within the next few decades”

    Electricity demand might double but since much of that electricity will be replacing very inefficient petroleum energy and since much will be generated by non-very inefficient fossil fuels, net energy use might not change much at all. Even with much higher use in the less developed world.

    • Frank

      I don’t even like the phrase “energy demand”. If we replace coal and gas fired electricity, with wind and solar, then the “quads” of energy demand for that electricity demand will drop by 60%, because coal and gas turbines are only 40% efficient. Not exact numbers, but you get the idea.

    • nitpicker357

      The cost of new power, INCLUDING EXTERNALITIES, is plummeting right now. We still have Africa to add as a demand source. Cheaper energy should increase economic growth rates, and may, in conjunction with cheaper communications, allow Africa to develop very rapidly. However, efficiency is still cheaper still for the developed world.

  • heinbloed

    The head knows that the body has no backbone, the worm wiggles better without.
    Shell abandoned PV a decade ago.

    • If you look back from 2007 until now, you can clearly see how She’ll, and others are trying to wiggle their way into a clean energy world. They sporadically come out with marketing campaigns, but you’re right, after a bunch of hoopla a few years ago, it quietly dropped its PV push. Can’t trust that rich industry unfortunately,

  • Ross

    Fossil fuel use increasing for the next several decades is probably a 2 – 3 standard deviations further away than is realistic given even existing trends.

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