Linda Cook, Head of Shell’s gas and power unit told reporters at a press conference in connection with Shell’s strategy update on 17 March: “We do not expect material amounts of investment in those areas going forward. They continue to struggle to compete with the other investment opportunities we have in our portfolio.”
Shell has over the past five years invested US$1.7 billion in renewable energy and projects to reduce CO2 emissions – just over 1% of its US$150bn investment budget over the same period. In comparison, the company recorded US$1.7 trillion in company sales and US$126.8bn in net profit for the 2003-2008 period.
Greenpeace UK Executive Director John Sauven, responded in a statement shortly after Shell’s announcement: “After years of running adverts proclaiming their commitment to clean power, they’re now pulling out of the technologies we need to see scaled up if we’re to slash emissions to the levels scientists tell us are safe.”
Last year Shell, which operates 550 MW of wind energy worldwide, withdrew from the 1 GW London Array offshore windfarm.
Green oil
Shell is not turning its back entirely on renewables however. Only a week before the strategy update, the oil company announced further investment into the development of biofuels.
Shell has expanded its agreement with industrial biocatalysts producer Codexis Inc for the development of enzymes to accelerate the commercialisation of the next generation biofuels.
Under the agreement, Codexis will work closely with Shell and Iogen Energy Corporation to enhance the efficiency of enzymes used in the Iogen cellulosic ethanol production process, and shorten the timeline to full-scale commercial deployment.
Iogen already has a biofuel demonstration plant in Ottawa, Canada, which currently produces hundreds of thousands of litres of cellulosic ethanol from agricultural residue such as wheat straw.
The Shell-Codexis deal also continues the collaboration agreement of November 2007 looking into other biofuels, researching new enzymes to convert biomass directly into components similar to petrol and diesel.
At the strategy update, Cook said biofuels fit into Shell’s core business: “It’s now looking like biofuels is one which is closest to what we do in Shell. Wind and solar are interesting [but] we may continue to struggle with other investment opportunities in the portfolio even with big subsidies in many markets.”