Greentech Media | By: Julia Pyper | July 11, 2017:
The oil giant’s New Energies division launched last year with an annual investment budget of just $200 million.
Royal Dutch Shell is accelerating its move into alternative energy, with plans to spend up to $1 billion per year on its New Energies division by 2020, CEO Ben van Beurden said at conference in Istanbul on Monday.
“In some parts of the world, we are beginning to see battery electric cars starting to gain consumer acceptance,” van Beurden said in a speech to the World Petroleum Congress, Bloomberg reported. He added that solar and wind costs are declining rapidly and those technologies are seeing greater adoption as a result.
“All of this is good news for the world and must accelerate,” he said.
Shell established the New Energies division in May 2016 to manage its investments in renewables and other low-carbon technologies. The alternative energy arm brought together Shell’s existing hydrogen, biofuels and electrical activities, and launched the company into wind power, The Guardian reported.
At the time, however, New Energies had an annual investment budget of just $200 million per year, totaling less than 1 percent of the amount being put into oil and gas.
The budget increase comes as success in the clean energy sector is raising questions about the long-term business model for fossil fuel majors. According to a recent report from Wood Mackenzie, renewables will be the fastest-growing primary energy source worldwide over the next 20 years, with average annual growth rates of 6 percent for wind and 11 percent for solar. Demand for oil, meanwhile, is forecast to grow just 0.5 percent per year.
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