Oil giant Shell to sell renewable energy to Texans

HOUSTON — Shell said Tuesday it would start selling electricity generated from renewable sources to residents and businesses in Texas, a move that brings the European oil company’s shift toward green energy to the U.S. market.

The announcement underscores a widening chasm between the strategies of European and US oil companies, as elected leaders and consumers demand that the energy industry do more to tackle climate change. European companies including Shell, BP and TotalEnergies are looking to expand into renewable energy, electric vehicle charging and other fast-growing businesses, as US companies such as Exxon Mobil and Chevron maintain their focus primarily on oil and gas. while investing in carbon capture from industrial plants and biofuels

Shell, which already has electricity businesses in nine countries, plans to double the amount of electricity it sells by 2030. The London-based company has also said it aims to reach net zero greenhouse gas emissions by 2050. If While many companies have the same goal, Exxon and Chevron have not set equally ambitious climate goals.

Shell executives said their new energy business in Texas would offer customers greater access to wind and solar power that is increasingly abundant in the state. It will also give EV drivers free charging at night, when electricity demand is low, and on weekends.

“Our goal is to reduce our carbon intensity,” said Glenn Wright, vice president of renewable energy and energy solutions for Shell in the Americas. “We have to take tangible steps, especially in this space, where we can engage customers with cleaner, renewable energy solutions.”

Shell said it would eventually expand its retail electricity business to other parts of the United States, including the eastern and southern states that are part of the PJM power market, the country’s largest regional transmission system. The company said starting in Texas made sense because more than 26 million of the state’s nearly 29 million residents were served by a single network operated by the Texas Electric Reliability Council.

About a dozen states, many of them in the Northeast, and the District of Columbia have competitive retail electricity markets. Although relatively few people have taken advantage of competitive markets, the Department of Energy found that a large majority of industrial and commercial customers have switched from the established utility in their area.

Texas and New Jersey have benefited most from lower prices in competitive retail markets. Texas has the most competitive electricity market in the country, according to the National Renewable Energy Laboratory.

Many people and businesses that tap into competitive markets tend to choose companies that offer renewable energy such as solar, wind, and hydropower. Big tech companies operating power-hungry data centers have led the push for green energy.

Other large European oil companies have also sought to expand into the energy business. France’s TotalEnergies said last month it was buying a 50 percent stake in Clearway Energy, a US wind and solar energy company, for $2.4 billion.

“It’s an important and serious move, but not a surprise either,” Michael Webber, a professor of mechanical engineering at the University of Texas at Austin, said of Shell’s plans. “They can see the future as well as anyone, and they are not in climate change denial.”

Of course, Shell’s investments in clean energy are small relative to the company’s oil and gas operation, but executives have said they plan to use some of their fossil fuel profits to set up new businesses with climate change in mind. .

Shell hopes to attract customers by offering incentives. Homeowners with solar panels will be credited the retail electricity rate for the excess power they send to the grid that residents pay to utilities for power. In Texas, compensation for energy that consumers send to the grid varies. Some utilities offer consumers lower wholesale prices, while others offer the higher retail rate that Shell promises.

“This is a huge growth opportunity, and there is going to be competition between oil companies like Shell that are turning around and tech companies like Tesla, Google and Apple,” said Amy Myers Jaffe, managing director of the Climate Policy Laboratory at Tufts. Fletcher School of Law and Diplomacy. “The irony is that it should come from existing public services, but they have generally been very resilient.”

Consumers who buy electricity from Shell will receive fixed prices for the duration of their contract, from six months to five years. The company will purchase the energy it sells to customers from wind and solar facilities throughout Texas.

Shell’s turnaround includes expanding investments in renewable energy, power trading and electric vehicle charging stations. In recent years, Shell has acquired an energy company in India that supplies solar and wind power, bought a wind farm developer in Australia and invested in a partnership with a Chinese company to develop charging stations in Asia and Europe. In Germany it acquired a battery supplier that develops its own power grids in competition with established utilities. In the United States, it is building hydrogen fueling stations, owns wind farms, and bought an energy trading company.

Despite its investments in renewable energy, some critics have argued that Shell is not moving fast enough. In a case brought by an environmental group, a court in the Netherlands last year ordered the company, formerly known as Royal Dutch Shell, to substantially reduce its emissions to offset its role in climate change.

Shell has said it will appeal the ruling and that it takes climate change seriously. The company has pledged to cut its oil production and cut its carbon dioxide emissions in half by 2030. Last year it sold its oil fields in the Permian Basin, which straddles Texas and New Mexico, for $ 9.5 billion, most of which was paid to shareholders in dividends and share buybacks.

Mr. Wright, the Shell executive, said the company was aiming to become a more diversified energy business. “We are an energy company,” he said. “So we’re not leaving oil and gas, we’re changing the portfolio mix.”

clifford krauss reported from Houston and Ivan Penn from New York.

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