Royal Dutch Shell will now be returning to the solar energy sector — after an absence of 12 or so years — following the acquisition of 43.86% stake in the US-based firm Silicon Ranch Corporation.
In other words, following on BP’s recent announcement that it was reentering the solar energy sector, with its fresh $200-million stake in Lightsource, Shell has followed suit.
Or, in yet other words … Shell is further hedging its bets beyond the oil and gas industry, as it has begun doing through its investments into plug-in electric vehicle charging stations.
This news was accompanied by the announcement that Shell has also given the go ahead to its first large oil and gas development project in the North Sea in 6 years — so, clearly the company isn’t “going green” so much as pursuing an “all of the above” strategy to survival.
Both announcements likely have some relation to the recent surge in oil prices.
“With this entry into the fast-growing solar sector, Shell is able to leverage its expertise as one of the top 3 wholesale power sellers in the US, while expanding its global New Energies footprint,” explained Marc van Gerven, Shell’s vice president of solar energy.
Reuters provides more: “Shell agreed to buy a 43.86% stake in Silicon Ranch Corporation from funds linked to Partners Group for up to $217 million … Nashville, Tennessee-based Silicon Ranch develops, owns and operates solar plants across the United States with a capacity of 880 megawatts. Shell also has an option to increase its ownership after 2021.
“In November, Shell doubled its planned investment in its new energies division, which focuses on renewables and low carbon technologies, to $1 billion-$2 billion until 2020. The investment in renewables far exceeds those of other major oil companies but still represents a fraction of Shell’s overall capital expenditure of around $25 billion.”
Those looking for more information on Shell’s other recent diversification efforts will want to take a look at last year’s acquisition of NewMotion, and last month’s agreement to purchase the UK’s First Utility (a mostly natural gas electricity + broadband supplier). Clearly the company sees some sort of transition approaching in the energy sector over the coming years and is making some changes.
Image via Silicon Ranch Corporation