Royal Dutch Shell Ceo Ben van Beurden announced a strategic review of the company. This comes, he says, as a result of the economic crisis caused by the corona virus pandemic. He believes the pandemic is accelerating the world’s transition towards greener energy. As a result of the review, Mr. van Beurden predicts a major restructuring of the company by the end of this year.
The pandemic is leading Royal Dutch Shell in a reNEWable direction
According to a source interviewed by Reuters Mr. van Beurden, in an internal company video, said part of the restructuring involves job cuts to reduce costs. Royal Dutch Shell is planning to reduce 2020 capital expenditure to $20 billion from a planned level of $25 billion, and it plans to cut an additional three to four billion from operating costs. The source is quoted as saying, “Ben spoke about positioning the company in the energy transition. The company will announce the new shape of the organization by the end of the year.” An official statement by Shell went along the same line, “Over the coming months we will go through a comprehensive review of the company. Where appropriate we will redesign our organization to adapt to a different future and emerge stronger.”
The road to zero emissions
In a video available to the public on Shell’s website, Mr. van Beurden went into more detail on how the company plans to move toward its goal of zero emissions by 2050. In February it was announced that Shell had invested in a large green-hydrogen project in the Netherlands. This project, currently a feasibility study, could lead to 3 – 4 gigawatts of Dutch offshore wind power being built solely for producing green hydrogen by 2030. The project has the potential of reaching 10 gigawatts of wind power by 2040.
In the same video, he says Shell is investing in an important project in Norway aimed at carbon capture. This project, called Northern Lights, includes the transportation, receipt, and permanent storage of CO2 in a reservoir in the Norwegian North Sea. This project has the potential of becoming the first CO2 storage area with the capacity of storing CO2 from multiple industrial facilities.
Wells Fargo, Shell, and solar
It isn’t just Royal Dutch Shell making changes. On this side of the pond, Shell Energy is also expanding its corporate interest in renewable energy. It recently reached an agreement with Wells Fargo. The bank contracted to buy 150 megawatts of solar power from Shell from three locations in Virginia and one in California. The Virgina contracts are for six years and seven months, and the California contract is for seven years. This 150 megawatts accounts for only 8% of Wells Fargo’s global energy needs, but Shell is not the only company from which it is contracting renewable power.
Wells Fargo has been the second largest lender to fossil fuel companies over the last four years, but they, like Shell, are seeing a different future. E.J. Bernacki, the bank’s spokesman for sustainability and corporate responsibility said, “… as the [energy] sector has evolved, so has our business … while Wells Fargo continues to work with our conventional energy and utility customers,” it was also “one of the largest lenders and investors in renewable energy and clean technologies.”
The COVID-19 pandemic has not only disrupted and changed the lives of millions if not billions, but it may be the catalyst for changing the future of energy.
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