Seeing this article was so shocking, that for a minute I was worried that somehow word of Plan B. had gotten out.
Shell has declared an ambition to double the amount it spends on green energy to $4bn (£3.2bn) a year, in a sign of how the Anglo-Dutch company is looking to speed up its move to a future beyond oil and gas.
Maarten Wetselaar, the head of the gas and new energy unit which generates a third of the company’s revenues, said he wanted to raise Shell’s investment in low carbon energy.
The company has already committed to spend $1bn-$2bn annually in the next two years, with the rest of its total $25bn budget invested in hydrocarbons.
Wetselaar said if his initial investments generated a good enough return, he would be able to successfully argue for an increase from 2020 onwards.
“I would like my current business to be financially credible enough for not only the company, but shareholders, to want to double it and look at more,” he said in an interview with the Guardian.
Stronger government action on global warming and the transition to a low carbon energy system has started a renewed push by oil majors into green energy.
Norway’s state oil company has rebranded as Equinor to reflect its move towards becoming a “broad energy company”, France’s Total has gone big on batteries, and BP has returned to solar six years after exiting the sector.
Wetselaar laid out the scale of the company’s aspirations for moving into electricity generation and trading, which have begun over the past year with the acquisition of firms such as First Utility, one of the UK’s biggest energy suppliers.
“There is no global provider of power in the world. And there is no global brand of power in the world. We provide energy globally and we have a global brand,” he said.
The executive denied the firm’s legacy as a fossil fuel producer would hinder its efforts to persuade people to buy clean power from it, saying company research showed people would buy electricity from it. “A trusted energy brand apparently travels, from fuels into power,” he said.
Solar will be the world’s biggest future source of low carbon power, he said, because of the number of regions it was viable in.
He acknowledged Shell had failed to make serious inroads on wind power yet, admitting it had lost out on as many as nine windfarm projects when competing in auctions for government subsidies. Until the two it won in the US this month, it had only won in the Netherlands.
But he said the firm was committed to the technology. “From a Shell perspective, we are very, very keen to win more in this game. In the North Sea but also offshore North America. And we’re even looking at China, India, Taiwan, Japan maybe.”
Buying up clean energy firms would be essential if Shell’s power business was to be on a par with its oil and gas business in the 2020s, he said. But he vowed to avoid acquiring traditional utilities that might become irrelevant in a world of decentralised energy.
“What I don’t want to buy is a huge old utility with outdated IT systems and a huge workforce that is still in the old ways of working.”
Other oil companies will follow Shell’s lead in recently tying executive pay to the company’s targets on cutting carbon emissions, he predicted. But he said it would be a mistake to limit oil firms’ carbon targets to their own operations and exclude emissions from the fuel burned by their customers, in a veiled barb at BP.
Some companies might be delaying such a wide scope on carbon goals over legal firms, he said.
Fossil fuel campaigners are increasingly turning to court cases to sue oil firms over global warming, such as Exxon Mobil being sued by the state of New York for downplaying the financial risk posed by governments acting on climate change.
Wetselaar said Shell would defend such legal challenges, which he viewed as a distraction that could pit regulators against companies and slow down the energy transition. “I see it as a waste of resource at both ends,” he said.
This article oiginally appeared on The Guardian