Shell (LON: SHEL) plans to sell leases it won to develop floating wind farms off the coast of Scotland, as the oil major continues to roll back a once-ambitious expansion into renewable power.
The company wants to sell its share of projects in a joint venture with Iberdrola SA’s Scottish Power to develop as much as 5 gigawatts of floating wind power plants, according to people familiar with the matter who asked not to be named because the matter is private.
A spokesperson for Shell declined to comment. Scottish Power also declined to comment.
The retreat by one of Britain’s biggest energy companies underscores the challenge facing the UK government in developing floating wind into a major industry, just as costs for the technology have increased.
© BloombergSince taking the helm at the beginning of last year, Chief Executive Officer Wael Sawan has refocused Shell on delivering profits to shareholders in what he’s called a “ruthless” approach.
The company is now more focused on getting access to low-carbon electricity for its own use and for trading rather than making investments to build large-scale renewable power that can take years to generate returns.
The shift in approach led the company to plan job cuts in its offshore wind division, Bloomberg reported earlier this year.
It’s a sharp change from Sawan’s approach as head of Shell’s integrated gas and renewables and energy solutions. In that role, Sawan championed wind power and was in charge of the unit that won the rights in the Scottish tender.
Since then, the offshore wind industry has struggled with rising interest rates, supply chain bottle necks and inflation, leading to soaring costs. That poses an even bigger problem for more expensive floating technology, which has only been applied in a handful of pilot projects so far.
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