I received an email from a friend last week asking me what I thought Shell’s announcement meant about their intent in Solar. I did not reply directly, not wanting to give a reply that was not based on any more knowledge than he had himself. However there seems to have been a flurry of announcements since then so I decided I had to try to assimilate them and decide on where I think Shell is going on renewables, so here goes:

Solar – on February 2, Shell announced that it had sold it crystalline silicon solar business to Solarvalue, lock, stock and barrel. This includes more than 500 employees as well as the mononcrystalline silicon ingot plant in Washington state and the manufacturing assembly plant in Camarillo. This transfer will make Solarvalue the largest US manufacturer and remove Shell from the equation completely. One Shell spokesman cited the silicon shortage and the difficulty in supplying product this past year as a major factor: I find this a little surprising since the silicon ingot manufacturing capability should have provided at least a little insulation from the current silicon shortage. Shell assert that they are still intent on supplying solar to the developing world and have signed a letter of intent with Good Energies to do so. Fine words – but they could even keep their promise without manufacturing! Not included in this transaction was Shell’s CIS technology, which they declared they would “further explore … technology and consider joint development” with St Gobain the French glass manufacturer. This does not seem to commit Shell to anything but cooperation and I strongly believe that EE Times was misled when, on February 20 they stated ” (Shell) announced last week that it will be devoting all of its billion-dollar R&D budget to CIS-based thin-film panels”. I suspect the actual investment is much closer to zero!

Wind – “Shell’s share of wind energy capacity is currently greater than 350MW, and is expected to reach approximately 500MW in 2007”, far short of industry leaders Ibedrola and FPL who each own over 3.25GW now! However Shell is already involved in several new wind projects in Europe, China and the US. Moreover they have been linked (but not yet convincingly) to a possible takeover of the Danish wind giant Vestas. It looks like Shell clearly favor wind over solar!

Biofuels – “Shell has an established position as the world’s largest marketer of Biofuels, as well as a leading developer of advanced Biofuels technologies”. I have no doubt that they do intend to milk this avenue for all that it is worth! Despite its potential drawbacks (see Heather Rae’s blog) it is less oily than its mainstream business yet is relatively easy to integrate into its current operations. Moreover it is likely to play a huge part in the developing African and Asian economies – especially China! While we might bemoan that it is not green, but yellow – or even something else, at least it is a certain step in the right direction of introducing an increasing degree of sustainability to energy supply – and that has to be good.

I have not tried above to form any conclusions on Shell’s intent with hydrogen and fuel cells: like all of their competitors they are heavily involved with the developing technologies but, understandably, have yet to demonstrate any clear commercial intent. As their CEO has said “we aim to develop at least one alternative energy such as wind, hydrogen or advanced solar technology, into a substantial business … (and) … continue our efforts to further expand our position as the largest marketer of Biofuels”. I don’t think any of my conclusions are at variance with this!