Shell Quits Brazil Wind and Solar Projects | OilPrice.com
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Breaking News:
Shell has decided to scrap wind and solar power generation projects it had planned to build in Brazil, citing the unfavorable investment environment, per a Reuters report.
“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,” the supermajor said in a statement, days after declaring a pivot away from alternative energy and a return to oil and gas as priority business areas.
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Reuters noted in its report that wind and solar power projects in Brazil have suffered setbacks in the form of oversupply of energy, presumably from other sources, a challenging regulatory landscape, and weak growth in demand for those alternative energy sources.
According to official data from the Brazilian state gazette, Shell had approached the country’s energy regulator with a request for it to revoke Shell’s rights to operate several utility-scale solar power plants in central and northeastern Brazil.
Earlier this week, at its investor day, Shell said it would lower its capex range for 2025 to 2028 and it would invest $20-22 billion per year through 2028, down from a range of $22-25 billion per year announced in 2023. Last year, Shell’s cash capex was $21 billion.
The supermajor also said it aimed to increase cost cuts from between $2 and $3 billion this year to $5-7 billion by the end of 2028, while boosting shareholder returns via share buybacks and dividends.
Shell was one of the first European majors to pivot back to oil and gas in a 2023 strategy to continue investing in oil and gas production and selectively pour capital into alternative energy solutions, as these solutions underwhelmed in terms of investment returns. Since then, Shell has slowly but inexorably been shrinking its exposure to wind, solar, and the rest of the transition industries.
By Irina Slav for Oilprice.com
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