Shell ditches British solar farms in net zero retreat

Shell is selling its British solar farm business to a French rival as it beats a retreat from net zero.

The UK’s biggest oil and gas company confirmed it had signed a deal to sell its European onshore renewables arm to France’s TotalEnergies.

The sale includes solar farms, battery storage and onshore wind projects in the UK, Italy, the Netherlands and Spain. The sites have a combined 500 megawatts of generation capacity, enough to power several hundred thousand homes.

It includes the newly built solar plant in Iddenshall, Cheshire, which will supply the UK’s largest public electric-vehicle charging network.

At one stage, Shell had been developing four UK solar farms with planned capacity of 100 megawatts.

The value of the deal has not been disclosed.

The sale comes as part of a wider retreat from renewables for Shell. In November, it pulled out of projects to build two giant offshore wind farms in the North Sea: the MarramWind and CampionWind schemes off the east coast of Scotland.

Since Wael Sawan, Shell’s chief executive, took over the FTSE 100 business at the start of 2023, Shell has scaled back investment in renewable power generation to focus on more profitable businesses such as gas production and trading.

The oil giant has since watered down its 2030 carbon reduction target and abandoned a 2035 interim target to reduce the carbon intensity of the energy it sells as part of its strategy to become a net zero emissions business by 2050.

Machteld de Haan, Shell’s president of renewables, said: “This agreement reflects Shell’s continued focus on actively managing and high-grading its power portfolio.

“We are recycling capital and prioritising areas where we have differentiated capabilities and can create the most value over time, including through asset-backed power trading and customer-focused energy solutions.”

The sell-off comes after rival BP put its North Sea oil and gas assets up for sale, following six decades of operation in the basin, where it employs 1,100 people, raising fears that the oil giant could quit the UK for good.

BP has also been unwinding its renewables investments after its efforts to focus on green energy prompted a shareholder backlash.

Shell’s deal with TotalEnergies does not include offshore wind or Shell’s hydrogen, carbon capture and storage, liquefied natural gas, chemicals or customer energy supply.

Shares in Shell dipped by 1.1pc in early trading on Monday. It reported last week that its profits more than doubled to almost $10bn (£7.5bn) in the first six months of the year on soaring oil prices amid the war in Iran.