Shell sells European onshore renewables to TotalEnergies

SHELL is selling its onshore European renewables unit to TotalEnergies, the companies said on Monday (Aug 3), as the British oil major continues to scale back its low-carbon investments to focus on upstream operations and trading.

Shell said the deal agreed with TotalEnergies includes assets in Italy, the Netherlands, Spain and the UK, though it did not disclose the sale price.

Since taking over as Shell CEO three years ago, Wael Sawan has shifted focus away from renewables, seeking better returns in oil and gas projects.

Last week, the group reported that its second-quarter profit more than doubled from a year earlier to the second-highest on record, helped by higher energy prices and stronger liquefied natural gas trading.

Adjusted earnings for its renewables and energy solutions segment was US$79 million, versus a loss of US$9 million for the same period a year earlier.

Shell has said it wants to focus its power business on supplying large customers with energy solutions that combine renewable power with less intermittent hydrocarbon-based generation.

UK peer BP is also refocusing on its oil and gas businesses after scaling back its investment in renewable energy.

TotalEnergies said the deal, expected to be completed by the end of 2026, includes a portfolio of about 500 megawatts of solar and wind assets in operation or under construction, mainly located in Italy and the Netherlands, as well as a 3.5 gigawatt (GW) pipeline of solar, wind and battery storage projects in Italy, the UK and Spain.

As of the end of the second quarter, Shell had about 4.5 GW of renewable power generation capacity in operation.

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TotalEnergies also announced on Monday a separate sale of a 50 per cent stake in a 1.2 GW European renewables portfolio to global investment firm KKR, valuing the portfolio at 1.8 billion euros (US$2.1 billion).

It said that both transactions were in line with its strategy to build renewable and gas-fired power generation capacity in key deregulated markets, while selling down up to half of its renewables holdings at a profit.

TotalEnergies’ European renewables asset portfolio amounts to almost 10 GW of gross installed capacity or capacity under construction, and 27 GW under development. REUTERS