Houston — Shell said on Tuesday that it would begin selling electricity generated from renewable energy sources to Texas residents and businesses. This is a move to bring the shift of European oil companies to green energy to the US market.
The announcement highlights the widening gap between European and US oil company strategies as elected leaders and consumers demand that the energy industry do more to tackle climate change. I am. European companies such as Shell, BP and TotalEnergies are looking to expand into renewable energy, electric vehicle charging and other fast-growing companies. US companies such as ExxonMobil and Chevron are investing in carbon recovery from industrial plants, with a focus primarily on oil and gas. Biofuel.
Shell already has electricity operations in nine countries and plans to double its electricity sales by 2030. Based in London, the company is Europe’s largest oil and gas business with revenue and operates in more than 70 countries. Includes gas stations, refineries, oil and gas fields.
The company states that it aims to achieve net zero greenhouse gas emissions by 2050. Many companies have the same goals, but Exxon and Chevron have not set similarly ambitious climate goals.
Shell executives said the new electricity business in Texas will provide customers with more access to the increasingly abundant wind and solar power generation in the state. In addition, electric vehicle drivers can charge for free at night and on weekends when electricity demand is low.
“Our goal is to reduce carbon strength,” said Glenwright, Vice President of Renewable Energy and Energy Solutions at Shell in the Americas. “Especially in this area where renewable and clean energy solutions can attract customers, we need to take a concrete step.”
Shell said it would eventually expand its retail electricity business to other parts of the United States, including the eastern and southern states that are part of the PJM energy market, the largest regional transmission system in the United States. The company said it makes sense to start in Texas, as more than 26 million of Texas’s approximately 29 million inhabitants were serviced by a single grid run by the Texas Electric Reliability Council. Said.
European shift from fossil fuels
The European Union has begun the transition to a more environmentally friendly form of energy. However, financial and geopolitical considerations can complicate efforts.
Approximately 12 states (many of which are in the northeast) and the District of Columbia have competitive retail electricity markets.But Relatively few individuals have taken advantage of the highly competitive marketThe Department of Energy has found that the majority of industrial and commercial customers have switched from existing utilities in the area.
Texas and New Jersey benefit most from low prices in the highly competitive retail market. According to the National Renewable Energy Institute, Texas has the most competitive electricity market in the country.
Many people and companies looking to competitive markets tend to choose companies that provide renewable energy such as solar, wind and hydro. Large technology companies that operate data centers that consume large amounts of electricity have led the promotion of green energy.
Other major European oil companies are also looking to expand into the electricity business. France’s TotalEnergies last month announced that it would buy a 50% stake in Clearway Energy, a US wind and solar power company, for $ 2.4 billion.
“This is an important and serious move, but not surprising,” said Michael Weber, a professor of mechanical engineering at the University of Texas at Austin. “They can see the future like anyone else and do not deny climate change.”
Shell’s investment in clean energy is small compared to the company’s oil and gas business, but management plans to use some of its fossil fuel profits to set up new businesses with climate change in mind. It states that there is.
Shell wants to attract customers by providing incentives. Homeowners who own solar panels are credited with retail electricity charges for surplus electricity that residents send to the grid to pay the utility. In Texas, there are various compensations for the electricity that consumers send to the grid. Some utilities offer consumers lower wholesale prices, while others offer higher retail prices than Shell promises.
Amy Myers Jaffe, Managing Director of the Institute for Climate Policy, Tufts University, said: Fletcher School of Law and Diplomacy. “Ironically, it should come from existing utilities, but generally speaking, they are very resistant.”
Consumers who purchase electricity from Shell receive a fixed price of up to 6 months and up to 5 years during the contract period. The company acquires energy to sell to customers from wind and solar equipment around Texas.
Shell shifts include increased investment in renewable energy, power trading and electric vehicle charging stations. In recent years, Shell has acquired an Indian power company that supplies solar and wind power, acquired an Australian wind farm developer, invested in a partnership with a Chinese company, and made charging stations in Asia and Europe. Developed. In Germany, we have acquired a battery supplier that competes with established utilities to develop its own power network. In the United States, we are building a hydrogen fuel station, owning a wind farm, and acquiring an energy trading company that sells electricity to companies.
Despite the investment in renewable energy, some critics claim that the shell isn’t moving fast enough. In a case filed by an environmental group, a Dutch court last year ordered a company, formerly known as the Royal Dutch Shell, to significantly reduce emissions to supplement its role in climate change.
Shell said it appealed the ruling and took climate change seriously. The company has promised to cut oil production and cut carbon dioxide emissions in half by 2030. Last year, it sold an oil field in the Permian Basin, which straddles Texas and New Mexico, for $ 9.5 billion, most of which was dividends and share buybacks.
The company’s carbon dioxide emissions related to energy production or carbon intensity have declined only slightly in the last few years, according to an annual report. Sustainability report.. Shell carbon strength rose in 2021 after a sharp decline in 2020 when the pandemic pushed down fossil fuel demand.
Shell executive Wright said the company is aiming to become a more diverse energy business. “We are an energy company,” he said. “Therefore, we are changing the composition of our portfolio rather than leaving oil and gas.”
Clifford Krauss reported from Houston and Ivan Penn from New York.