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Shell to Buy French Offshore Wind-Power Developer
Royal Dutch Shell Plc has agreed to buy French offshore wind developer Eolfi SA, continuing its expansion into renewable power.
The Anglo-Dutch oil major is boosting spending on low-carbon energy as it faces pressure to address the risks climate change poses to its business. Shell鈥檚 biggest renewable bets so far have been on acquiring retail customers, through the purchase of a U.K. utility and an electric car charging company.
Eolfi has a foothold in one of the most developed markets for floating wind projects, in the shallow waters off France, which could give Shell the experience and expertise it needs to boost investments in the technology.
鈥淓olfi has been a pioneer of floating wind development,鈥 said Dorine Bosman, vice president of offshore wind for Shell. 鈥淲e believe the union of Eolfi鈥檚 expertise and portfolio with Shell鈥檚 resources and ability to scale-up will help make electricity a significant business for Shell.鈥
Winning in Wind
By 2030, installed capacity of floating offshore wind could reach 1.2 gigawatts across seven countries, with France becoming the biggest market, according to a forecast from BloombergNEF. So far, Equinor ASA has dominated the sector among Big Oil, winning the right to build the world鈥檚 biggest offshore wind farm in the U.K. with partner SSE Plc in September.
The head of Shell鈥檚 business unit that includes low-carbon investments, Maarten Wetselaar, said earlier this year he thinks the oil major could become the largest electricity company in the world within 15 years as it pivots away from fossil fuels. Wind will be a key component of that strategy, executives have said.
In January, Shell said it鈥檚 teaming up with a pension fund to bid for a Dutch utility called Eneco, which focuses on clean power. On Thursday, Chief Financial Officer Jessica Uhl said bids for the company were due within a week. Shell鈥檚 overall budget for 鈥渘ew energies鈥 is about $2 billion a year, less than 10% of its capital expenditure budget, though it鈥檚 expected to rise to as much as $3 billion by 2021.
Shell didn鈥檛 disclose terms for the purchase of Eolfi. The company has more than 65 employees in Paris, Lorient, Marseilles and Montpellier. It has developed over 200 onshore and offshore renewable energy projects in five countries, according to a statement from Shell. The deal is expected to close in December.
Norton Rose Fulbright was the legal adviser of Eolfi, and Vulcain acted as its financial adviser.
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