spare change

Shell helps German battery maker Sonnen rake in €60 million

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Germany needs more of these bad boys. Source: Reuters

Anglo-Dutch oil major Shell has taken a stake in the German solar battery maker Sonnen by participating in a new €60 million ($70 million) financing round. The former startup also collected money from GE, Chinese wind power group Envision and other investors, Handelsblatt learned.

It’s an investment in line with Shell’s goals of allocating up to $1 billion per year, or 6 percent of total profit, in green energy by 2020, to help the oil giant boost its eco credentials.

Shell also plans to cooperate with the Bavarian-based Sonnen, which provides battery storage systems to households with rooftop solar panels in Germany, Europe’s biggest solar market, in the areas of charging infrastructure and battery storage.

“Investing more in energy is surely a good strategy in a world in which electrification is one of the quickest ways to reduce CO2, the spokesman said, adding that Sonnen was the right partner for that. The spokesman did not provide further details and Shell wouldn’t say whether its gas stations will soon be fitted out with e-charging points made by Sonnen.

John Feddersen, head of Britain’s Aurora Energy Research, believes Shell’s investment amounts to more than just “greenwashing,” a sentiment that Sonnen boss Christoph Ostermann agrees with: “Shell has proved to us that it’s serious about converting to renewable energies. That’s not a given.” Other companies made grand announcements and then took little action, he said.

In recent years, oil companies have been falling over themselves to shed their image as climate killers – but it’s an uphill battle. Of the 25 companies responsible for more than half of the world’s industrial greenhouse gas emissions, 18 are oil firms, according to a study by the Climate Accountability Institute and the Carbon Disclosure Project.

Many major oil companies now support the Paris Climate Accord and have pledged to reduce global CO2 emissions. BP recently invested €20 million in Israeli battery startup Storedot, which is working on reducing charging times for electric cars to less than five minutes.

Major oil companies will have to invest at least $350 billion in wind and solar power by 2035 to preserve their current market status.

It isn’t clear whether the focus on green energy is due to a change of heart or external pressures like international efforts to curb climate change, the growth in e-cars or the prospect of driving bans for old combustion vehicles in major cities. But the oil industry is speeding up its transition. On Wednesday, Hamburg announced a ban on some diesel vehicles from two major roads, making it the first German city to take the step that automakers and drivers have been dreading.

The switch to green tech also stems from falling oil prices in recent years. The latest abrupt increase in prices could test the oil companies’ new-found optimism regarding renewables, Mr. Feddersen said.

And a study by consultancy Wood Mackenzie says the major oil companies will have to invest at least $350 billion in wind and solar power by 2035 to preserve their current status as the world’s main energy providers.

But although the five oil giants Shell, BP, Exxon Mobil, Chevron and Total managed to treble their combined profit to $53.6 billion last year, they’ve been slow to invest in infrastructure for e-vehicles.

The five big gas station operators in Germany have installed only 60 charging points at their 7,200 stations, according to daily newspaper Die Welt. Shell and automakers BMW, Daimler, Volkswagen, Audi, Porsche and Ford have announced plans to install 500 rapid charging points in the next two years — but at a just 80 gas stations in 10 countries in Europe.

Currently, the whole of Germany currently has fewer than 5,000 public charging points. Meanwhile, the oil companies continue to pump billions into developing new oil and gas fields. Comparatively, Shell’s $1 billion per year by 2020 is a drop in the rising ocean.

Kathrin Witsch is an economics and politics editor at Handelsblatt. To contact the author: k.witsch@vhb.de

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