Shell takes aim at British and German offshore wind deals

Royal Dutch Shell (RDSa.L) wants to buy into the British and German offshore wind markets as it attempts to shift its business away from fossil fuels.

Immediate opportunities in the world’s biggest offshore wind markets will be through buying stakes in leases, rather than building new projects, Dorine Bosman, business operations manager for Shell’s wind business, told Reuters on Tuesday.

The world’s second-biggest oil major on Monday won a contract to build 700 megawatts (MW) in offshore wind capacity off the Dutch coast together with consortium partners Eneco, Van Oord and Mitsubishi/DGE.

Shell has been forced to slash billion of dollars in costs due to weak oil and has started to ramp up investments in the green energy sector to build a strategy beyond fossil fuels.

“We’re looking at (offshore wind) opportunities in the UK and Germany,” Bosman said.

Shell, which is under growing pressure from shareholders to diversify, is studying acquisitions in the green energy sector, its chief executive told Reuters last month.

It won the latest Dutch offshore wind tender round offering a strike price of 54.5 euro per megawatt-hour (MWh), a quarter below the last tender which was won by Denmark’s Dong Energy (DENERG.CO) in July for 72.7 euro per MWh.

Bosman said Shell and its partners were able to bring costs down by eliminating duplications and bottlenecks early on because they worked together from the start.

Some of Europe’s biggest offshore wind farm developers are Dong Energy, Sweden’s Vattenfall [VATN.UL] and German utilities E.ON (EONGn.DE) and Innogy (IGY.DE).

Source:reuters