Royal Dutch Shell has committed itself to the development of new energy technologies such as electric vehicle charging as well as models used to cut energy use among customers. Through the New Energies unit, Shell plans to invest approximately $1 billion annually in the next ten years as the oil major tries to conform to a world that is increasingly gravitating towards lower carbon use, cleaner fuels, more electrification and decentralized energy use.
According to Wall Street firm Goldman Sachs, the demand for oil could hit its peak in 2024 as more electric vehicles are launched as well as due to reduced economic growth and rising fuel prices. In light of this, the oil major is increasing its level of involvement in revolutionary technologies. Mark Gainsborough, the New Energies executive vice president at Shell is expected to expressed hope over the oil major’s ability to commercialize its efforts at a speech to be delivered in Amsterdam, Netherlands.
Age of electric cars
Among the steps Shell has taken in this direction include offering fast-charging facilities to owners of electric vehicles at its retail outlets. Additionally Shell is developing smart charging with a view to evening out electricity grid demand besides developing products that assist its customers in energy management. The New Energies Division is also putting up solar panels at sites that it owns as well as offshore wind farms.
According to the chief executive officer of Royal Dutch Shell, Ben van Beurden, the company will increase its stakes in renewables gradually as it acquires more skills required to become successful. Currently Shell is one of the biggest renewable energy trader in the United States and it will start direct supply of power to corporate customers in the United Kingdom in 2018.
But van Beurden is, however, cautious and warns that the transition could take decades. Consequently there is a risk of making premature investments and this outweighs the risk of adapting slowly.
“We have to continually find a balance. How fast can we go? What are sensible steps? But one thing I know for sure: this is a road we have to be on, that we have to win,” says van Beurden.
Before the complete transition can be made, van Beurden is confident that the traditional businesses of Shell are capable of staying healthy and relevant even in the 2030s mainly as a result of demand emanating from both the developing and emerging economies.