Exclusive-Shell’s US Solar Unit Launches Asset Sale, Sources Say
Shell’s U.S. Solar Business Savion Initiates Asset Sale
Shell’s U.S. solar business Savion has decided to put up approximately 25% of its assets for sale, according to reliable sources and a marketing document. This move comes as the oil giant continues its trend of moving away from owning renewable projects, a strategy set in motion under the leadership of CEO Wael Sawan.
Investment Bank Jefferies Handling the Sale
Jefferies, a prominent investment bank, is overseeing the sale of solar generation and storage assets amounting to up to 10.6 gigawatts. These assets are either currently in development or may involve selling parts of those projects in various regions across the United States.
Valuation Details Remain Unclear
The total value of these assets, spread across different regions in the country, remains ambiguous. Valuations of such projects often hinge on the prevailing power prices in specific locations.
Shift in Strategy Under CEO Wael Sawan
This strategic shift marks the latest turn in Shell’s evolving stance under CEO Sawan, who assumed office in January 2023. Sawan has been vocal about prioritizing the most profitable ventures, as evidenced by the move to divest from ownership of renewable assets in favor of other business models.
Focus on Higher-Margin Projects
Shell’s current focus is on high-margin projects, consistent oil output, and ramping up its overall production capacity. The company aims to emphasize accessing low-carbon power that can be traded rather than solely owning generation assets.
Importance of Renewables in Energy Transition
Despite fluctuations in renewables valuations, these assets continue to play a crucial role in the energy transition. As interest rates decline, these assets are expected to garner substantial attention, according to insights from KPMG.
Strategic Asset Sale for Savion
The U.S. portfolio, known as “Dasher,” is set to be divested to allow Savion to hone its focus on executing Shell’s integrated power markets strategy. This move aligns with Shell’s broader objective of streamlining its operations and reshaping its portfolio towards sustainable growth.
