Shell retains commitment to $1bn annual investment in renewables

Royal Dutch Shell Plc has reiterated its commitment to spend as much as $1 billion a year on its New Energies division, indicating it is closely following the transition toward renewable power and electric cars.

Shell chief executive, Ben van Beurden, stated this at the World Petroleum Congress in Istanbul, Turkey, which is a gathering of ministers and heads of some of the largest oil producers in the world.

“In some parts of the world we are beginning to see battery electric cars starting to gain consumer acceptance while wind and solar costs are falling fast,” Van Beurden said in a speech he delivered on Monday.

He further stated: “All of this is good news for the world and must accelerate while still offering opportunities for producers of fossil fuels.

“Shell sees opportunities in hydrogen fuel-cells, liquefied natural gas and next-generation biofuels for air travel, shipping and heavy freight – areas of transport for which batteries aren’t adequate. The intermittent nature of wind and solar energy means power plants fired by natural gas will have a long-term role.”

In March, Van Beurden, disclosed for the first time at the CeraWeek in Houston, that it will soon be investing around $1 billion a year in renewable energy. He noted that Shell’s renewables investments could hit $1 billion by 2020, and that he expected renewable energy investments to account for an increasing portion of the company’s expenditure.

But in Istanbul, Van Beurden, however highlighted the potential for some of the fastest-growing nations to leapfrog straight to a cleaner energy mix.

According to him: “When you consider the areas of the world where energy demand is still to expand, like Asia and sub-Saharan Africa, there is a huge opportunity. These are areas that are not, on the whole, locked in to a coal-driven system. There is the potential for them to shift more directly onto a less energy-intensive pathway to development.”

“There is often too much focus on energy-transition policies in Europe and North America instead of the fast-growing developing world. What happens in England is important, but what happens in Ethiopia is at least as important. From Denmark to the DRC, from the U.S. to Uganda, to India, to China, there is a lot of work to do. These countries will still require fossil fuels to develop industries such as steel, cement and chemicals because they need a heat intensity that cannot come from electricity alone,” he said.