Shell Initiates Sale of a Quarter of its Solar Business in US

By Editor


Shell has initiated the sale of approximately a quarter of its US-based solar business, Savion, Reuters news report said.

The move to sell a part of its solar business comes as the oil major continues its strategic shift away from owning renewable energy projects under CEO Wael Sawan.

Investment bank Jefferies is overseeing the sale of up to 10.6 gigawatts (GW) of solar generation and storage assets currently in development or portions thereof.

While the total value of the assets remains undisclosed, their locations span the northeast, southeast, and west regions of the United States. Project valuations typically hinge on local power prices.

Savion, which is developing a total of 39.1 GW of solar and storage projects and has completed sites with a capacity of over 2.3 GW, according to its website, was acquired by Shell in December 2021. This acquisition was part of a broader strategy initiated under former CEO Ben van Beurden to expand Shell’s presence in the low-carbon energy market and reduce its carbon footprint.

Shell’s renewables power generation capacity has reached 2.5 GW in operation and 4.1 GW under construction and/or committed for sale, according to data available on its website.

The sale process marks another milestone in Shell’s evolving strategy under Wael Sawan, who assumed office in January 2023 with a commitment to focusing on the most profitable ventures. In June, Wael Sawan articulated Shell’s intention to concentrate on accessing low-carbon power for sale and trade, rather than retaining ownership of generation assets, which typically yield lower returns.

Renewables valuations have experienced a decline, but KPMG noted in a recent report that these assets remain crucial to the energy transition and are likely to attract attention as interest rates decrease.

The sale of the U.S. portfolio will enable Savion to redirect its efforts towards executing Shell’s integrated power markets strategy, Shell said in a document.

Shell has divested its power retail businesses in Britain and Germany, exited several floating offshore wind projects, and downsized its hydrogen business.

Additionally, Shell is exploring exits from certain refining operations and its onshore oil business in Nigeria. As part of its cost-saving measures, Shell has initiated company-wide staff reductions, including within its low-carbon solutions division, with aims to save up to $3 billion.

Latest News