Oil giant Royal Dutch Shell starts selling electricity - Finance and Markets

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Royal Dutch Shell contracted small but strategic acquisitions in an area of electrical power. Over the past few months, the British-Dutch oil giant has bought an electric vehicle charging company, as well as stake in a solar power company, aiming to link its huge oil and gas production to futuristic energy business.
Shell believes it can make a profit from changes in the energy market amid a more tangible presence of renewable energy by combining its big energy trading affiliate with a stable supply of oil and gas in the absence of sun or wind.
Shell said it could even compete with technology companies by analyzing data on how and when customers use electricity to provide them with the best deal.
According to the plans of Shell, it will be able to extract gas in several decades to use for electricity production and then sell power to homes, companies and charging stations for electric vehicles. The model is similar to the petroleum business of the company.
Shell plans to spend between one and two billion dollars per year in its New Energy division by 2020 – more than other big oil companies devote to renewables and electricity generation. The company builds wind farms on European coasts and announced that its future investments could also include gas-fired power plants.
However, the sale of electricity remains a challenge. The oil industry has already lost billions of dollars in its previous efforts to target renewables. Some time ago, Shell went into unsuccessful projects for wind farms and solar power, which forced withdrawal from these sectors for years. At the same time, the oil companies avoided highly regulated, localized and low-return business related to the production and sale of electricity.
Shell acts cautiously, investing a small portion of its 25-30 billion USD capital cost in a new energy business. The company will be primarily a producer of oil and gas in the coming decades.
Shell’s acquisition of British company First Utility gives a customer base of 825,000 homes in the UK and Germany. At the same time, New Motion, one of the world’s largest electric vehicle charging companies, gives it more than 30,000 points for charging electric cars in private homes and over 50,000 public charging points in Europe. Together with the company, Ionity Shell plans to install 500 high-speed charging stations in ten European countries in the next two years.
In the long run, it is expected that the number of electric vehicles on the European roads will grow, encouraged by the measures in France, the UK and other countries to ban internal combustion engines.