The Royal Dutch Shell is gradually divesting from huge investment in hydrocarbon to renewable energy in line with the global emerging trend for cleaner energy with minimal or zero emission.
The global oil giant just acquired United Kingdom’s largest electric vehicle charging network. According to a report by Financial Times, with the acquisition, Shell is expanding its presence along power supply chain.
The report noted that Shell has agreed to buy Ubitricity, owner of the largest public charging network for electric vehicles in the UK, as the oil major expands its presence along the power supply chain even as street charging is expected to expand rapidly as customers who lack private driveways and those that wish to charge their vehicles overnight seek greater options.
Shell, the report explained, said Monday it would buy 100 per cent of the company for an undisclosed amount. Ubitricity, founded in Germany, is a leading European provider of on-street charging for electric vehicles.
The company, which integrates electric car charging into street infrastructure such as lamp posts, has more than 2,700 charge points in the UK, giving it a market share of 13 per cent.
Shell said the acquisition would help it expand into on-street charging. It already has more than 1,000 fast and ultrafast charging points at 430 Shell retail stations and a greater number including those owned by partners and affiliates at forecourts and motorway service stations.
Subject to regulatory approval, the deal is expected to close later this year.
Street charging is expected to expand rapidly as customers who lack private driveways and those that wish to charge their vehicles overnight seek greater options. István Kapitány, who heads Shell’s mobility business, said: “Working with local authorities, we want to support the growing number of Shell customers who want to switch to an [electric vehicle] by making it as convenient as possible for them.”
Like peers such as Total and Repsol, Shell has been expanding along the electricity supply chain in recent years as it looks to build a business that will be resilient through an energy transition towards cleaner fuels.
Investors and environmentalists have demanded that oil companies take greater responsibility for their role in enabling climate change, forcing Europe’s energy majors to make new pledges for cleaning up their businesses.
Shell, like BP and others, said last year it would become a net-zero emissions business. It is expected to detail its plan for how to get there next month at its strategy update.
Shell case puts spotlight on energy groups’ role in climate change. While top leaders at the company plan to accelerate spending into cleaner businesses, they are also wary of abandoning lucrative legacy hydrocarbon divisions too soon.
For example, while electric vehicle adoption is accelerating, the fleet is still dwarfed by those with traditional engines. Demand for petrol and diesel is expected to remain robust for decades to come.
While Shell’s leadership insists it has been on the right path, some executives have said it is not moving fast enough given the rapidly changing demands of the public, investors and climate activists.
The pressure to take climate action has grown over the past year, even as the coronavirus pandemic battered the balance sheets of international oil players.
Lockdowns and travel bans dramatically cut demand for oil and led to a collapse in oil prices, hitting earnings.
Shell cut its dividend for the first time since the Second World War, slashed spending by billions of dollars and said it would cut 9,000 jobs as part of a major restructuring.
The company is expected to announce its fourth-quarter results next week.
