As the world changes and customer needs change, Shell is adapting too. We aim to make electricity a significant business for Shell, one that in the future could sit alongside oil, gas and chemicals.
How can the UK transition to a low-carbon energy future while also making sure everyone continues to have access to the energy they need? Meeting this challenge will require fundamental changes in the way energy is produced, used and made accessible to people.
Electricity is a key part of the answer
One of the ways the UK can help meet this challenge is to increase the role for electricity in its energy system. This is because electricity can be generated from lower carbon sources such as wind and solar, as well as natural gas, the cleanest-burning hydrocarbon.
At Shell, we aim to make electricity a significant part of our business, one that in the future could sit alongside oil, gas and chemicals. This means being involved at almost every stage: from generating electricity, to buying and selling it, to supplying it directly to customers.
In 2017, we bought one of the UK’s leading independent energy suppliers, enabling us to supply electricity and gas directly to customers’ homes. It has since been rebranded Shell Energy, and now supplies customers across Britain with 100% renewable electricity as standard. We also supply smart home technology designed to make customers' homes more energy-efficient and convenient to run.
In 2018 we signed a five-year deal with British Solar Renewables to buy all the electricity generated by their Bradenstoke solar power plant in Wiltshire.
We are also looking at opportunities to invest in offshore wind generation in the UK, as we have done in the Netherlands.
Hydrogen also has the potential to decarbonise Britain’s buildings. It can be stored at high energy density in liquid or gaseous form for long periods of time and can be combusted in boilers for heating homes and water. As such, Shell believes that there is a role for hydrogen to play in the decarbonisation of central heating systems. Learn more here.
Powering electric vehicles
Currently transport emits more C02 emissions than any other sector in the UK. To help reduce these emissions and improve air quality, Shell is encouraging the uptake of Electric Vehicles (EVs) by investing in a range of charging infrastructure.
Over the past three years this service has expanded rapidly and there are now over 70 EV charge posts available at Shell forecourts across the UK. These include both rapid 50kW chargers and high-powered 150kW chargers. Shell aims to increase the number of Shell Recharge posts on forecourts to 200 by the end of 2021.
Powering the grid
An increasing number of people in the UK now generate their own electricity through solar panels and wind turbines. Unlike a central grid, these systems generate and store electricity close to the customer. Shell has started to participate in this new model of ‘distributed power’.
In 2019 we bought German company Sonnen, which provides battery storage systems to homes with solar panels to help boost energy-efficiency. In the same year we also bought a company called Limejump, a digital platform based in London which helps small generators of renewable energy optimise their sales of electricity to the grid.
In November 2020 Shell Energy Europe – one of our power trading businesses – signed a 15-year agreement to buy 20% of the renewable energy that will come from Dogger Bank Wind Farm, which is on course to become the world’s biggest offshore wind farm. Our 480-megawatt offtake will provide enough clean power for the equivalent of around 800,000 UK homes.
Why electricity is only part of the answer
Some people suggest that the UK could do without oil and gas tomorrow. but this is not the case. For example, natural gas is currently used to heat over 80% of UK homes*, and is it not yet clear what will take its place.
As yet, there is no easy, scalable and cost-competitive low-carbon replacement for aviation fuel. And only around 2.6% of new cars sales in 2018 were electric**, including plug-in hybrid electric vehicles.
The transition to new sources of energy around the world, and equally in the UK, requires major change to industrial, commercial and residential infrastructure, as well as in customers’ choices. This will take time and substantial investment.
In the meantime, the UK will continue to require oil and gas for some time to come.
*source: UK Government
Power outside the UK
Shell's activities in the electricity sector cover many countries. For example, Shell Energy North America manages more than 10,000 megawatts of power generation capacity, one-third of which comes from renewable sources. It supplies electricity to commercial and industrial customers such as schools, hospitals, offices and factories in the USA.
Shell's investments in the Borssele III/IV offshore wind farm project in the Netherlands and wind power in the USA, along with US solar firm Silicon Ranch and Cleantech Solar in Singapore, have also increased Shell's involvement in renewable power.
In the transport sector, Shell has signed a deal with IONITY, an operator of high-powered vehicle charging networks. The agreement will see the provision of 500 charging points across 10 European countries by 2020, starting with 80 of the biggest Shell motorway stations.
We have also bought Greenlots, a California-based provider of EV charging points, charging network software and grid services across the USA. Greenlots has a growing business in Canada, Thailand, Malaysia and Singapore.
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Shell wants to be a leading player in the transport system of tomorrow. That is why we are taking action today, investing in a range of new transport fuels with low or no carbon emissions, and helping our customers to offset the transport emissions that are less easy to avoid.