Shell’s (Possible) Move. Interesting to read that the CEO of Shell is publicly considering a sale of the renewable power unit. I say interesting because Shell was founded on the basis of the energy transition from coal to oil. It was the British Navy’s decision to use oil as the fuel that not only created a major market for Shell but ultimately built the BP empire. Now that the transition from molecules to electrons is happening, it would make sense for the oil majors to lean in on the transformation and recognize that batteries are the new oil tankers and generation is the commodity feeding the growing energy demand across the world. Given how portfolio sales have priced recently (see Duke), now wouldn’t be the greatest time to make this move.
Arbitrage Value. Curtailment is an unfortunate side effect of renewable resource growth in the market. The sun shines when the sun shines and wind is similar. With curtailment comes inherent value of arbitrage because the delta between time X and time Y expands if time X (time of production) goes to 0.
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- Bloomberg: Shell Explores Selling Stake in Renewable Power Unit
- Reuters: Energy curtailments likely to rise as Texas wind and solar capacity increases -EIA
- Utility Dive: DTE Electric agrees to speed Michigan coal plant retirements, renewable and energy storage buildout
- PV-Tech: Aquila and Trina sign 800MW European module supply deal
- New York Times: Republicans Assail Kerry’s Climate Strategy as He Prepares for China Talks
- Energy Storage News: Residential battery installations grew 83% in Europe in 2022
- PV-Magazine: Michigan utility settlement revises resource plan to add 3.8 GW of renewables
Opinion
Best, Yann