Shell Backs Off Offshore Wind

The winds keep shifting at Shell.

On Tuesday Bloomberg reported that Shell has started to shop around for buyers to offload its stake in an offshore wind project off the coast of Scotland. Shell declined to comment both to Bloomberg and The Daily Upside, but the news is indicative of Shell’s shrinking energy transition ambitions.

Winds of Change

Shell has made it clear that it’s not hitting the accelerator on clean energy. CEO Wael Sawan took the top job in January 2023, and in November of that year, he told the Financial Times he wants the company’s energy transition strategy to be “leaner,” adding that it “inevitably will include choices around where we are going to operate but also importantly how we operate.”

As well as watering down some oil production targets and selling “phantom” carbon credits, the newest stage in Shell’s less-green strategy is to ice planned projects:

• Shell announced earlier this month it’s pausing development at a huge biofuel plant project that’s been in the works since 2021, citing a need to “address project delivery and ensure future competitiveness given current market conditions.” The European biofuel industry has hit a rough patch, with supply outpacing demand.
• The offshore wind industry has also been struggling. The sector weathered a stormy 2023, hit hard by high inflation and interest rates, suffering what was essentially its first full-blown financial crisis.

Shell already cut the size of its in-house offshore wind team in May, Bloomberg reported.

More Squalls: The industry is also facing a major supply chain squeeze. The FT reported on Saturday that increased demand for parts plus tight shipping availability is throwing yet another storm in the direction of the UK’s offshore wind industry, just as the Labour government is gearing up to make offshore wind a cornerstone of its energy policy.