Oil giant Shell strikes deal to buy power from ‘world’s largest offshore wind farm’
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Shell said Wednesday it had signed a deal to purchase power from a development dubbed “the world’s largest offshore wind farm.”
The 15-year power purchase agreement relates to 240 megawatts from Dogger Bank C, the third and final phase of the 3.6 gigawatt Dogger Bank Wind Farm, which will be located in waters off the coast of northeast England.
The agreement builds upon a previous deal to purchase 480 MW from Dogger Bank A and B, meaning that its combined offtake will amount to 720 MW.
On Wednesday, Dogger Bank Wind Farm announced it had also agreed 15-year power purchase agreements for Dogger Bank C with Centrica Energy Marketing & Trading, SSE Energy Supply Limited and Danske Commodities.
“The commercial power agreements provide a route to sell the green energy generated by the third phase of the wind farm into the GB electricity market when it enters commercial operation,” it said.
Dogger Bank A and B represents a joint venture between Equinor, SSE Renewables and Eni, with the companies holding stakes of 40%, 40% and 20% respectively.
This month, it was announced Eni would also acquire a 20% stake in Dogger Bank C, with Equinor and SSE Renewables each holding on to a share of 40%. This deal is slated for completion in the first quarter of 2022.
“Once the three phases are complete, which is expected by March 2026, Dogger Bank will be the largest offshore wind farm in the world,” Dogger Bank Wind Farm says.
Despite making deals related to renewable energy, Shell remains a major player in oil and gas. It has pledged to become a net-zero emissions energy firm by 2050.
In February, the business confirmed its total oil production had peaked in 2019 and said it expected its total carbon emissions to have peaked in 2018, at 1.7 metric gigatons per year.
In a landmark ruling earlier this year, a Dutch court ordered Shell to take much more aggressive action to drive down its carbon emissions and reduce them by 45% by 2030 from 2019 levels.
The verdict was thought to be the first time in history a company has been legally obliged to align its policies with the 2015 Paris Agreement. Shell is appealing the ruling, a move that has been sharply criticized by climate activists.
In October, billionaire activist investor Dan Loeb called on the business to break up into multiple companies to strengthen its performance and market value.
Shell acknowledged Loeb’s letter to clients calling for the company to split, saying it “regularly reviews and evaluates the Company’s strategy with a focus on generating shareholder value. As part of this ongoing process, Shell welcomes open dialogue with all shareholders, including Third Point.”
More recently, in mid-November, Shell said it would move its head offices to the U.K. from the Netherlands, and ditch its dual share structure. Under these plans, the firm’s name would change from Royal Dutch Shell plc to Shell plc.
“The simplification will normalise our share structure under the tax and legal jurisdictions of a single country and make us more competitive,” Andrew Mackenzie, the company’s chair, said at the time.
–CNBC’s Sam Meredith and Chloe Taylor contributed to this article.