Shell goes green
The Royal Dutch Shell plc CEO Ben Van Beurden announced on the 10th of July 2017 that the company will invest one billion dollars per year from 2020 in renewable energy. A comforting turn around in their situation considering that the group in 2011 disclosed that they would no longer invest in clean energy.
Prevent a future need
“In some parts of the world, we are beginning to see battery electric cars starting to gain consumer acceptance” thus, as stated by Shells general director renewable energy will soon become unavoidable. Indeed, with the many technological advances, the cost of clean energy, such as wind power or solar energy, will drop while, at the same time, fossil fuels will see their prices increase. At a time where demand in fossil fuels is declining, the huge oil company had to react. It is estimated that the economic model in clean energy will represent 50% of the world needs in 2050, the Royal Dutch Petroleum wants to make sure to be able to meet this demand and to insure its position as one of the largest multinational corporation in the world for the days to come. While the growth of wind energy represents 6% per year against 0,5% for oil, Shell had to make some radical changes in order to be able to respond to market needs.
Improving energy-transition on an international level
In response to Russian Minister Amin Nasser who claims that oil and gas still have a bright future, Van Beurden emphasizes the importance to support energy transition on a global level, and more specifically in developing countries. Energy-transition policies are too often focused upon Western countries, Shell CEO claims that “When you consider the areas of the world where energy demand is still to expand, like Asia and sub-Saharan Africa, there is a huge opportunity. These are areas that are not, on the whole, locked in to a coal-driven system. There is the potential for them to shift more directly onto a less energy-intensive pathway to development.”
Creation of a new division
In 2016 Royal Dutch Shell created the New Energies division. The main goal is to improve the management of clean energy investments and support technological advances in this area. The oil company sees many opportunities in renewable energy and is involved in various projects, dealing with for example hydrogen batteries, liquefied gas etc. With this new announcement, the New Energies divisions budget will increase from 200 million dollars to a billion dollars per year, enough to guarantee technological progress in clean energy.
To conclude, it is reassuring to see a giant oil company such as Shell make drastic changes in their policies and invest in renewable energies. Nevertheless the company is confronted with an equilibrium problem, between investing in clean energy on one hand, and on the other hand being able to return 25 billions dollars to the shareholders before the end of this year.
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