[R-G] Big Oil lets sun set on renewables

[Tom Childs]

http://www.corpwatch.org/article.php?id=14847
Big Oil lets sun set on renewables

by Terry Macalister, Guardian (UK)
December 11th, 2007
 
Shell, the oil company that recently trumpeted its commitment to a low

carbon future by signing a pre-Bali conference communique, has quietly

sold off most of its solar business. 

The move, taken with rival BP's decision last week to invest in the
world's 
dirtiest oil production in Canada's tar sands, indicates that Big Oil 
might be giving up its flirtation with renewables and going back to its
roots. 

Shell and BP are among the biggest producers of greenhouse gases in the

world, but both have been keen to paint themselves green through a
series 
of clean fuel initiatives. 

BP, under its former chief executive, John Browne, promised to go
"beyond 
petroleum" while Shell has spent millions advertising its serious
interest in 
the future of the environment. 

But at a time when interest in solar power is greater than ever, with
the 
world's first "solar city" being built at Phoenix, Arizona, a small 
announcement from Environ Energy Global of Singapore revealed that it 
had bought Shell's photovoltaic operations in India and Sri Lanka, with
more 
than 260 staff and 28 offices, for an undisclosed sum. 

The sell-off, to be followed by similar ones in the Philippines and 
Indonesia, comes after another major disposal executed in a low-key way
last year, when Shell hived off its solar module production business.
The division, with 600 staff and manufacturing plants in the US, Canada
and Germany, went 
to Munich-based SolarWorld. Shell has however formed a manufacturing 
link, with Saint-Gobain, and promised to build one plant in Germany. 

The Anglo-Dutch oil group confirmed yesterday that it had pulled out of
its 
rural business in India and Sri Lanka, saying it was not making enough

money. 

"It was not bringing in any profit for us there so we transferred it to

another operator. The buyer will be able to take it to the next level,"
said a 
spokeswoman at Shell headquarters in London. 

The oil group said it was continuing to move its renewables interests
into a 
mainstream business and hoped to find one new power source that would 
"achieve materiality" for it. Shell continues to invest in a number of

wind farm schemes, such as the London Array offshore scheme, which has

government approval. Shell has also been concentrating its efforts on 
biofuels, but declined to say whether it had given up on solar power
even 
though many smaller rivals continue to believe the technology has a
bright 
future. 

Environmental groups have always accused Shell of using clean energy 
initiatives as "greenwash" to deflect criticism from its core carbon 
operations, especially tar sands. The latest pull-out has annoyed rival

business leaders at London-based Solar Century and local Indian
operation, 
Orb Energy, who fear the impact of a high-profile company selling off
solar 
business. Jeremy Leggett, chief executive of Solarcentury and a leading

voice in renewable energy circles, said Shell was undermining the
credibility 
of the business world in its fight against global warming. 

"Shell and Solar Century were among the 150 companies that recently 
signed up to the hard-hitting Bali Declaration. It is vital that
companies 
act consistently with the rhetoric in such declarations, and as I have
told Shell 
senior management on several occasions, an all-out assault on the 
Canadian tar sands and extracting oil from coal is completely
inconsistent 
with climate protection. 

"This latest evidence of half-heartedness or worse in Shell's
renewables 
activities leaves me even more disappointed. Unless fossil-fuel energy

companies evolve their core activities meaningfully, we are in deep
trouble," 
he said. 

Damian Miller, former director of Shell Solar's rural operations and
now 
chief executive of Orb Energy, said Shell was missing an opportunity by
pulling 
out at a time when renewables markets were starting to mature in the 
developing world. He alleged some customers were complaining of being 
abandoned by Shell and worried about the servicing of equipment they
could 
expect from Environ. "We see former Shell customers who are highly 
disappointed not to be receiving proper service for the solar systems
they 
have invested in. These customers have often invested 20-30% of their 
annual income in a system to ensure they have some minimum amount of 
lighting and access to radio, TV, or a fan," said Miller. 

He added that the oil majors, including Shell, had invested time and
energy 
in promoting their plans for renewable energy in the press and on TV,
but 
were not able to lead the transformation the world needs towards
renewable 
energy and energy efficient solutions. 

Shell declined to comment on these criticisms or talk about where its 
priorities lay. But the chief executive, Jeroen van der Veer, did make
a 
number of comments last summer which could have paved the way for a 
change in policy. Alternative energy sources such as renewables will
not fill 
the gap, he argued, forecasting that even with technological
breakthroughs 
they could give supply only 30% of global energy by the middle of the 
century. "Contrary to public perceptions, renewable energy is not the
silver 
bullet that will soon solve all our problems," he said. 

Meanwhile, BP has been accused by Greenpeace Canada of lining itself up

to help commit "the biggest environmental crime in history". This
follows its 
decision to swap assets with Husky Oil, giving it an entrance ticket to
the 
Alberta tar sands, which are said to be five times more
energy-intensive to 
extract compared to traditional oil. 

John Browne, the group's former chief executive, had said BP would not

follow Shell into tar sands as he established an alternative energy
division 
and pledged to take the group "beyond petroleum." The new boss, Tony 
Hayward, has pointed the corporate supertanker in a new direction
although 
his public relations minders insist BP remains committed to exploring
the 
potential of renewables. 

"Tony Hayward has been part of the management team at BP for many 
years and has endorsed the low-carbon strategy that involved BP
creating 
its alternative energy business late in 2005. We are spending $8bn
(£4bn) 
over ten years and are pressing ahead with 450 megawatts of wind 
production capacity in the US," said a spokesman. "The tar sands deal
in 
Canada does not represent a change in direction, it was just a very
good 
opportunity which represents a broadening of the portfolio." 

Greenpeace climate campaigner Joss Garman said: "If Shell is to survive

the climate change age... it needs to become not just an oil company
but an 
energy company. One wonders if Shell's executives have noticed what's 
happening in Bali or if we'll see slick adverts on TV boasting about
their 
retreat from renewables. Probably not."