Shell scraps two UK offshore wind projects

The first, believed to be last week, was when Shell sold its 50% interest in MarramWind to ScottishPower Renewables (SPR), a site 75km off the northeast coast of Scotland in water depth of 111 metres on average. The floating wind project was predicted to generate up to 3GW of electricity.

The sale of its stake resulted in Shell becoming the sole owner of the CampionWind project, another floating wind project, further south from MarramWind and around 60km from shore, in waters around 70 metres deep. Once Shell became the sole owner, it returned the lease for the project to Crown Estate Scotland.

The CampionWind website is now offline.

“Following on from the process of Shell selling its 50% interest in MarramWind to SPR, Shell has become the sole owner of the CampionWind project,” said a spokesman for Shell.

“After a comprehensive review and in line with Shell’s previously announced refocusing of its power strategy on leveraging Shell’s strengths in trading and retailing, the conclusion was to not take the CampionWind project forward. Shell therefore returned the lease option to Crown Estate Scotland (CES).

“Shell believes that returning the CampionWind lease to CES will offer the best opportunity for any potential future the site may have. Substantial pre-investment work has already been undertaken to de-risk the site, which Shell hopes will support any possible future.”

Despite the decisions, the spokesman said Shell remained ’committed to supporting the UK’s offshore wind ambitions through trading, marketing, and enabling development via long-term contracts’.

“Shell’s strategic pivot focuses on playing to our strengths in power trading and integrated energy solutions rather than majority share investments in power generation assets,” he said.

Shell won the leases for both sites in a 2022 auction, but costs have soared since then.

Oil giant timidity

It is not alone among oil giants showing reluctance to continue in offshore wind: BP CEO Murray Auchincloss has said the company’s transition away from fossil fuels had been ‘far too fast’ and that its faith in green energy had been ‘misplaced’.

“Our optimism in 2020 for a fast energy transition was misplaced and we went too far, too fast in our plans,” Auchincloss said in March this year. ”We have now fundamentally reset our strategy. We are reducing and reallocating spending to our highest-returning businesses to drive growth. And we are relentlessly pursuing performance improvements and cost efficiency.”

In March, however, it announced a joint venture with Japanese firm JERA to form JERA Nex BP, effectively keeping its hand in without so much risk.

”The launch of JERA Nex bp shows bp executing our strategy as we outlined at our Capital Markets Update in February – growing low-carbon energy with discipline whilst being capital light,” a spokesperson told Maritime Journal.