Shell plc, alongside Spanish utility company Verbund is preparing binding bids to buy renewable energy assets in Spain valued at about $1.1 billion, sources have informed Reuters.
The portfolio is being sold by Spanish fund manager Q-Energy, which is taking advantage of strong demand among European energy businesses under rising pressure from investors and governments to address climate change.
Included among the assets is 75MW of solar capacity that guarantees core earnings of €60mln per year and a development project with the capacity to generate about 3.6GW of electricity once completed.
Shell, Naturgy and Q-Energy declined to comment. Verbund did not immediately respond to a request for comment.
Should Shell be successful, it would add to the number of solar and renewable energy acquisitions made, with it this year winning a licence with Iberdrola’s Scottish Power to develop wind farms in the North sea.
Binding bids are due by the end of April, according to Sources.
Since February 2021, Shell has detailed its strategy to achieve its target to be a net-zero emissions energy business by 2050.
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In October 2021, Shell set a revised target to reduce absolute emissions by 50% by 2030, from 2016 levels, which includes all Scope 1 and 2 emissions (direct greenhouse emissions that occur from sources that are controlled or owned by an organisation) and even outlined a $5-6 billion per year investment plan in green energy after a District Court in The Hague ruled that by 2030, Shell must reduce its worldwide net-carbon emissions by 45percent, compared with 2019 levels.
Even as recent as last October, Third Point, a US hedge fund and activist shareholder, sought to break up Shell, by saying the Anglo-Dutch supermajor had “too many competing stakeholders,” resulting in “an incoherent, conflicting set of strategies attempting to appease multiple interests but satisfying none.”
“Global oil & gas majors have been transitioning to full-stack energy behemoths with an enhanced play across renewables and natural gas, along with value chain expansion,” said Prateek Jhawar, head,
infrastructure & real assets, Avendus Capital.
Shell posted income of $20.6 billion in CY 2021, compared with a loss of $21.5 billion the previous year while its cash flow from operations went from $34.1 billion in 2020 to $45.1 billion in 2021.
Last December, it acquired US-based solar and energy storage developer Savion from Macquarie’s Green Investment Group, to expand its global solar portfolio as part of the push to move to net-zero emissions. With the buyout, Shell said it aimed to sell more than 560 terawatt hours globally per year by 2030 — twice as much electricity as the company sells currently — and expected to serve more than 15 million retail and business customers worldwide.
It has also bought 100percent of Australian renewable company Meridian Energy Australia Group which operates energy retailer Powershop.
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