The oil company Royal Dutch Shell Plc doesn’t plan to make any more large investments in wind and solar energy in the future and does not expect hydrogen to play an important role in energy supply for some time. Linda Cook, head of Shell’s gas and power unit told reporters at a press conference on Tuesday “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,” Cook said of solar and wind.
The future of Shell’s involvement in renewable energy will be principally limited to biofuels, which the world’s second-largest oil company by market value thinks has more synergy with its core oil and gas operations.
Over the last twelve months, the company said it was refocusing its wind business on the U.S. as it pulled out of European projects.
At the moment Shell has around 550 megawatts of wind power capacity but has not revealed figures for investment in each renewable energy source.
It is reported that between 1999-2006 Shell invested around $1.25 billion in green energy with wind making up a large part of that figure.
The decision could reflect the $100/bbl drop in oil prices since July which has eased concerns about energy supply and the economic crisis which has pushed environmental concerns down the agenda claim some renewable energy analysts.
It is likely that the decision marks a downturn in political and economic pressure to invest in renewable energy projects and infrastructure.
Environmental groups may be angered at this decision after they have put some much pressure on Shell over its major investments in Canada’s oil sands, an energy and water intensive business which involves squeezing crude from bitumen-soaked soil.
It’s interesting to note that although Shell’s advertising focuses about 90 percent on its involvement in renewable energy, only around 1 percent of its investments are targeted at those energy flows.