Shell Plays Hot Potato with Solar Assets: A Tale of Strategic ‘Enlightenment’

Posted by John Donovan: 29 Feb 24

In an astonishing turn of events that will surely leave us all basking in the warm glow of irony, Shell, the poster child for fossil fuel philanthropy, has decided to play a round of hot potato with approximately a quarter of its US solar business, Savion. That’s right, folks, the same company that’s been drilling its way into our hearts (and the planet) is now making a strategic pivot so bold, it might just qualify for an Olympic gymnastics routine.

Under the visionary leadership of CEO Wael Sawan, Shell is embarking on a journey away from owning those pesky renewable energy projects that just don’t sparkle with the same profitability as their oily counterparts. Investment bank Jefferies has been roped in to oversee this dazzling display of corporate acrobatics, aiming to offload up to 10.6 gigawatts (GW) of solar generation and storage assets that are, frankly, cramping Shell’s style.

But don’t worry, the party isn’t over yet! These assets, whose total value remains as enigmatic as Shell’s long-term environmental strategy, are scattered across the US like confetti, from the northeast to the wild west. And while we’re not privy to the exact price tag on these green baubles, one thing’s for certain: the dance of dollars and cents continues unabated.

Let’s take a moment to reminisce about December 2021, a simpler time when Shell, under the stewardship of former CEO Ben van Beurden, swept Savion off its feet in a bid to waltz into the low-carbon energy market. Fast forward to the present, and it seems the honeymoon is over, with Shell’s renewable energy capacity standing at a whopping 2.5 GW in operation (cue the applause for this Herculean effort).

But here’s where it gets juicy: Sawan, in a stroke of unparalleled genius, declared in June that Shell’s heart truly belongs to accessing low-carbon power for sale and trade, rather than being bogged down by the commitment of ownership. After all, why settle for lower returns when you can chase the high-stakes thrill of the energy market?

In a plot twist that’s as predictable as a soap opera, renewables valuations have taken a hit. But fear not, for KPMG assures us that these assets are still the belle of the ball in the energy transition saga, destined to capture hearts and wallets as interest rates start to simmer down.

This sale, affectionately dubbed “Dasher” (because why not add a dash of holiday spirit to the mix?), is Shell’s way of saying, “It’s not you, it’s me,” to its solar ventures, allowing Savion to single-handedly carry the torch of Shell’s integrated power markets strategy. How noble.

But wait, there’s more! In a thrilling subplot, Shell has been cutting ties left and right, from power retail businesses in Britain and Germany to various offshore wind projects, not to mention a strategic retreat from its hydrogen ambitions. And let’s not forget the ongoing saga of Shell’s Nigerian oil escapade and the company-wide staff reductions aimed at saving a cool $3 billion. Because in the end, who needs employees when you’ve got profits to chase?

So, as we stand back and admire Shell’s latest maneuver in the energy sector’s game of thrones, one can’t help but marvel at the sheer audacity of it all. Shell’s commitment to the most profitable ventures, steady oil output, and ramping up natural gas production is indeed a testament to its unwavering dedication to… well, Shell.

And as for the rest of us? We’re left to ponder the age-old question: “What the f**k?”