Business

Shell to buy power from “the world’s largest offshore wind farm”

Offshore wind farm.

Davey Hughes UK | The moment | Getty Images

Shell said Wednesday it has signed a deal to buy electricity from what has been dubbed “the world’s largest offshore wind farm.”

The 15-year power purchase agreement covers 240 megawatts from Dogger Bank C, the third and final phase of the 3.6 gigawatt Dogger Bank wind farm, which will be located off the coast of northeast England.

The agreement builds on a previous deal to buy 480 MW from Dogger Bank A and B, which means it will have a cumulative take-off capacity of 720 MW.

Dogger Bank Wind Farm announced Wednesday that it has also negotiated 15-year power purchase agreements for Dogger Bank C with Centrica Energy Marketing & Trading, SSE Energy Supply Limited and Danske Commodities.

“Commercial energy agreements provide a pathway for the sale of green energy generated by the wind farm’s third phase to the UK electricity market when it comes into commercial operation,” the report said.

Dogger Bank A and B is a joint venture between Equinor, SSE Renewables and Eni, in which the companies hold 40%, 40% and 20%, respectively.

It was announced this month that Eni will also acquire 20% of Dogger Bank C, with Equinor and SSE Renewables each holding 40%. The deal is scheduled to be completed in the first quarter of 2022.

“Following the completion of three phases, which is expected by March 2026, Dogger Bank will become the largest offshore wind farm in the world,” says the Dogger Bank wind farm.

Despite the conclusion of deals related to renewable energy sources, Shell remains a major player in the oil and gas sector. By 2050, it has pledged to be a zero-emissions energy firm.

In February, the company confirmed that total oil production peaked in 2019 and said it expects total carbon emissions to peak in 2018 at 1.7 metric gigatons per year.

In a landmark ruling earlier this year, a Dutch court ordered Shell to take much more aggressive action to cut carbon emissions and cut them 45% by 2030 from 2019 levels.

The verdict was believed to be the first time in history that a company was legally obligated to bring its policies in line with the 2015 Paris Agreement. Shell will appeal the decision, a move that has come under fire from climate activists.

In October, billionaire investor activist Dan Loeb called on the business to split into multiple companies to boost productivity and market value.

Shell has taken note of Loeb’s letter to customers calling for the divestiture, which says it “regularly reviews and evaluates the company’s strategy with an emphasis on increasing shareholder value. As part of this ongoing process, Shell encourages open dialogue with all shareholders, including Third Point. “

As recently as mid-November, Shell announced that it would move its headquarters to the UK from the Netherlands and ditch the dual share structure. Under these plans, the firm’s name will change from Royal Dutch Shell plc to Shell plc.

“Simplification will normalize our share structure within the tax and legal jurisdictions of one country and make us more competitive,” said at the time, chairman of the company Andrew McKenzie.

—Sam Meredith and Chloe Taylor of CNBC contributed to this article.


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