Actors to follow: Shell

Shell is one of the majors of oil directly impacted by the decarbonization of energy. As at Total and BP, its direct competitors, Shell’s strategy anticipate a very strong evolution of its energy mix. Yesterday mainly focused on oil, it will rest tomorrow on 4 pillars including gas and electricity.

Shell plans to allocate 1 to 2 billion in investments to support this transition. De facto, these amounts make it an actor to consider because the impact of such amounts will not be neutral on the market of traditional utilities.

His strategy covers two aspects:

– Shell wants to develop for gas and electricity the same model as that applied for oil: the control of each step, from production via renewable energy sources to consumption.

– Shell wants to take a very active part in electric mobility, in the process of strongly cannibalizing traditional mobility.

Without the legacy of past electricity and gas activities, Shell invests and directly develops “new energy” activities, linked to decentralized generation, to electric mobility and to digitalisation.

As part of its first strategic pillar, Shell has acquired:

– Silicon Ranch Corporation, owner-operator of solar farms in the US in 2018

– MP2 energy, energy supplier for industrial and commercial customers in the US in 2017

– First utility, energy supplier for residential customers in UK in 2019

– Sonnen, provider of residential storage solutions in Germany in 2019

– Limejump, English aggregator of flexibility in 2019

– GI energy, a developer of microgrids and energy infrastructure for large sites in the US in 2018

As part of a position on electric mobility, Shell acquired:

– Newmotion, leading manager of a network of charging stations in 2017

– Greenlots, developer of charging and energy management solutions in 2019

In addition, Shell has made some remarkable investments in Autogrid, a provider of energy management software, and in Axiom energy, a supplier of thermal storage solutions.

The application coverage of Shell’s acquisitions is important. In many cases, Shell has set its sights on an undisputed leader (Newmotion, Sonnen) of a new business field, as if to be certain to take a substantial lead over its pursuers because Shell is not the only oil company to have to evolve strongly.

Its acquisitions are focused on the United States and the United Kingdom, which makes these two countries a base for the development of its new activities.

With so many acquisitions in such a short period of time, Shell’s challenges are now to organize its activities in a coherent manner by successfully integrating them into an emerging entity and to design a global offering for its customers. Such issues deserve special attention to the integration of small structures into an often strong culture, that has never been the strong point of large corporations.

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