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Energy Giant Shell Acquires US-based Savion

Energy Giant Shell Acquires US-based Savion
December 19, 2021 Salman Qureshi

Last year, Shell introduced the most ambitious strategy to be seen in the oil and gas sectors to date. The oil mammoth intended to reduce greenhouse gas emissions to net zero by 2050, as long as its customers showed the same ambition.

This has now been followed up with a ground-breaking acquisition. Shell seeks to revolutionise its ancient fossil fuels business by taking over US giant developer Savion, one of the largest, most technologically advanced utility-scale solar and energy storage project development companies in the US.

The director of Shell’s integrated gas and renewable energy solutions, Wael Sawan said “Savion’s significant asset pipeline, highly experienced team, and proven success as a renewable energy project developer make it a compelling fit for Shell’s growing integrated power business.” 

Why Act Now?

Oil giants in recent years have faced mounting pressure to change their business models and address climate change. In an attempt to protect against fears of what climate change could mean for the economy, some banks in Europe are already acting by abandoning clients with high emissions, and banks in the US are now following suit. However, in reality these banks know how crucial giants like Shell are to the energy world, without who the world would not be what it is today. It is not profitable nor sustainable to just drop these gas and oil businesses at will, hence banks are encouraging oil and gas companies to go green. If such companies decide to not take action on their impact on global emissions and climate change themselves, they will likely be faced with a plethora of higher capital requirements, raised prices, and denied loan requests to name a few examples. On the face of it, these proposed penalties seem harsh, but arguably one of a necessary kind if ground-breaking climate change targets are to be met in the coming years.

Shell’s Energy Transition

Society has had a desire to move away from fossil fuels for a good while now, and it is well documented that the use of such fuels at such a rate is not sustainable economically or environmentally. Shell acknowledged this fact early this year in February when it declared in a statement that it would reduce oil production gradually 1-2% year on year, outlining its commitment to a greener future. This was a big turning point for one of the world’s leading oil companies, and the hope is that other gas and oil companies follow in a similar fashion in the bid for net zero by 2050. 

The Bottom Line

Shell appears intent on fighting climate change in the face of government regulations and mounting investor pressures, and acquiring Savion is a big step in the right direction. The overall plan includes investing a $6 billion a year into renewable energy projects in general, and to make strides into the renewable electrical energy market. Shell currently has 60,000 electric vehicle charging points worldwide, and is planning on increasing this eightfold to 500,000 charging points by 2025 to meet the demand in the coming years. Shell, who are the 19th largest company in the world (according to 2020 revenues), appear to be taking climate change seriously and could be well positioned to be a leader in the green energy revolution. 

About Pager Power

Pager Power undertakes technical assessments for developers of renewable energy projects and tall buildings wordlwide. For more information about what we do, please get in touch.

References

Thumbnail image accreditation: Pixabay. (July 2016), Landscape Photography of Factory. Accessed on 19 Dec, 2021. Available at: https://www.pexels.com/photo/air-air-pollution-chimney-clouds-459728/

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