Shell to dump renewable energy assets in Brazil
Oil giant still owns 44% of sugarcane ethanol powerhouse Raizen, but Brazilian renewables ambitions are waning
Oil supermajor Shell has reportedly decided to walk away from solar and onshore wind power generation projects in Brazil, in line with a global strategy that has reduced spending on low carbon businesses, especially renewables.
The move also comes in an increasingly challenging environment for renewable power investments in Brazil, where projects have struggled to be implemented due to oversupply of energy, a slow growth in demand, regulatory issues and grid bottlenecks.
"We are always exploring ways to create value from our power generation portfolio, including exiting activities that do not fit into our strategy or do not generate sufficient returns," Shell told the news agency.
Shell said added it will continue to operate Prime Energy, a firm that has smaller solar generation assets in Brazil, part of a segment called "distributed generation".
Valuation gap
The wider backdrop to Shell’s moves is an ongoing effort to increase the return on investment and keep up an aggressive share buyback programme as the London-headquartered company tries to close a valuation gap with US peers.
Shell’s biggest investment focus is now on natural gas and LNG, after the company abandoned plans to become a top player in electricity and lead a global shift to clean energy.
The company’s shares are up more than 20% since the chief architect of this strategy, Wael Sawan, became CEO at the start of 2023.
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