“The convolutions of a smooth-lipped shell”

There has been great astonishment that one of the oil majors, Shell, has announced its intention to become the world’s biggest power company within 15 years. The multinational thinks electrification will grow rapidly, and is apparently eyeing double digit returns from “smart trading and the management of flexibility.”

Fresh from taking over First Utility, the largest of the Big Six challengers, (without ever bothering to inform its customers) Shell’s New Energies director Maarten Wetselaar is stressing that the company is not so interested in legacy power sector business or economics, but will concentrate instead upon “intermittent demand and supply.” For verisimilitude, it has now bought up the DSR aggregator Limejump and the home battery storage firm Sonnen.

For the past quarter century, Shell has concentrated entirely upon the oil and gas markets. But those with long memories may recall that back in the 1980s, Shell’s then senior directors made some bold steps into the demand management market. It developed Emstar, under its former superstar Richard Tinson, into the largest energy services company in Europe. It also placed the maverick Colin Gibson as CEO of Thermocomfort, who turned it into the UK’s largest cavity wall insulation firm. 

At the same time, BP had similar ventures. With BP Energy as a third-party financing giant, and co-ownership of the Danish firm Rockwool, the world’s second largest insulation manufacturers. But then, Shell senior management changed. As did that of BP. Both took the view that they should return to concentrating upon their historic role – the production and marketing of fossil fuels. 

So, both oil majors abandoned their energy management interests. The question therefore arises: how long before Shell gets bored with “new energies”, and returns to concentrating upon the oil and gas market again?