16 May Shell establishes new green energy division
Europe’s biggest oil company, Shell (LSE: RDSB) has announced its creation of New Energies – a separate division that will invest in renewable and low-carbon power.
The news comes after a leading economist at Chatham House warned oil companies that they have to transform their business or face a “short, brutal” end within ten years.
New Energies combines its existing hydrogen, biofuels and electrical activities and will also be used as a base for a new approach to wind power.
The new division currently has US$1.7 billion of capital investment and an annual capital expenditure of $200 million. It will be run parallel to the Integrated Gas division headed by Maarten Wetselaar, Shell’s executive board member.
Paul Stevens, a fellow at Chatham House said: “The prognosis for the IOCs [international oil companies] was already grim before governments became serious about climate change and the oil price collapsed, their old business model is dying.”
No formal announcements have been made about New Energies, but Shell is expected to reveal the new business on 7 June in London.