(Oil Price) – Shell has exited two offshore wind power projects in Scotland as the world’s top oil and gas firms continue to scale back their investment and involvement in renewable energy.
Shell has ditched plans to build two wind farms offshore Scotland, days after announcing it is withdrawing from the Atlantic Shores Offshore Wind project in the United States.
Offshore Scotland, Shell sought to develop the MarramWind project in a 50/50 joint venture with ScottishPower Renewables, and to build the CampionWind offshore wind farm as sole owner of the project.
However, Shell has now sold its 50% in MarramWind to ScottishPower Renewables, which will develop the proposed floating offshore windfarm that could deliver up to 3 gigawatts (GW) of renewable energy, enough to power the equivalent of more than 3.5 million homes.
Shell has also returned the CampionWind lease to Crown Estate Scotland.
The supermajor and Iberdrola-owned ScottishPower Renewables won the leases in Crown Estate Scotland’s landmark ScotWind Leasing auction in January 2022.
But regulatory changes, cost inflation, and high interest rates have impacted project economics in the offshore wind industry in the past three years.
“Shell believes that returning the CampionWind lease to CES will offer the best opportunity for any potential future the site may have,” the supermajor said in a statement emailed to Bloomberg.
Shell and the other European supermajor, BP, have shifted focus back to their core oil and gas business. The pivot took place after the energy crisis made energy security and affordability more important than sustainability, while high interest rates and supply chain issues further reduced already meager returns from clean energy projects and made many new energy ventures uncompetitive.
Two weeks ago, Shell withdrew from the Atlantic Shores 50-50 joint venture with EDF power solutions, established to develop offshore wind projects off the coast of New Jersey and New York.
Shell assigned its 50% outstanding membership interests to the existing joint venture partner with immediate effect.
“This decision was taken in line with Shell’s power strategy, where we continue to maximize the value of our platforms and high-grade our portfolio, shifting away from capital-intensive generation projects to assets that support our trading and retail strengths,” the supermajor said.
By Tsvetana Paraskova for Oilprice.com
