Royal Dutch Shell Leader Says Company Takes the Long View with Low-Carbon Energy, Fuel Investments

Eighteen months ago, Royal Dutch Shell opened a new division dedicated to exploring opportunities in low-carbon power and transportation fuel. It’s a business strategy focused on survival.

Known mainly as an oil and natural gas company, Shell is taking the long view, said Marc van Gerven, vice president of solar at Shell’s New Energies Division, during a March 29 talk at the California Energy Commission.

“Society is starting to ask us for these solutions and we are trying to move with society, along the path of the energy transition,” he said.

Between 2018 and 2020, Shell intends to spend between $1 to $2 billion of its $25 to $30 billion in annual capital investments in what van Gerven called “emerging opportunities” – projects adjacent to the company’s core assets that help it evolve with the energy market.

These ventures are now the purview of the New Energies division, which has based its U.S. operations in San Francisco. The division is focusing on new fuels and renewable electricity, which plays a major role in a technically possible, but challenging path developed by Shell to achieve the goals of the Paris Agreement.

Power will hopefully become a “new business pillar for Shell in decades to come,” van Gerven said.

Shell has started by investing in commercially viable technologies like offshore wind and solar.

At the Port of Stockton, the company built a photovoltaic project to provide onsite solar power to its fuels distribution terminal. While the project is only expected to produce more than 300,000 kilowatt hours each year, it provided development and permitting experience that informed efforts to build another solar project at a Shell facility in Australia, van Gerven said.

In January, Shell expanded its solar offerings by becoming the largest shareholder of Silicon Ranch, a Tennessee-based solar energy developer that contracts with utilities, solar cooperatives, municipal utilities, and commercial and industrial customers.

Through the New Energies division, Shell is also investing in alternative, low-carbon fuels and technology, including infrastructure for electric and hydrogen fuel-cell cars. The company has received funding from the Energy Commission’s Alternative and Renewable Fuel and Vehicle Technology Program to build several hydrogen refueling stations at its gas stations in California.

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