The oil majors' power moves
Shell. Photo: Ali Balikci/Anadolu Agency via Getty Images
Oil-and-gas giant Royal Dutch Shell and two partners rolled out a new business unit Thursday that provides a suite of energy services to buildings, such as heating and cooling, efficient lighting, controls, and electric vehicle charging.
Why it matters: It's the latest wrinkle in the growing movement of some of the largest multinational oil companies — especially European-headquartered players — into the electricity space, although it remains a small part of their overall portfolios.
- Shell's new unit, called Shell Energy Inside, provides services on a "subscription" basis, wherein customers pay fixed monthly expenses.
The backdrop: For instance, today the Norwegian oil-and-gas giant Equinor announced its latest move in renewable energy: an $82 million deal to obtain an almost 10% share in the multinational solar power company Scatec Solar ASA.
Where it stands: Shell is working with two companies in the U.S. market to offer the power services to commercial, industrial and municipal buildings.
- Sparkfund, which specializes in providing various building energy technologies on a subscription basis.
- GridPoint, which provides "smart building" controls, software and analytics.
Background: Shell states on its website that, in deregulated markets, the Shell Energy Inside services will be bundled with retail power from Shell Energy North America and its Texas-based subsidiary MP2 Energy.
- Shell recently soft-launched Shell Energy Inside when VP of energy solutions Brian Davis mentioned it in an interview with Greentech Media.
- Thursday marks the formal rollout and identification of partners.
What they're saying: I chatted with Sparkfund CEO Pier LaFarge. He argued that the subscription offering is part of a broader way of imaging how energy services are provided, much the same way that, say, Netflix has shaken up entertainment.
- “We have iPhone-d the delivery of energy outcomes inside the building and we keep all of the crazy behind the curtain," he said.
- LaFarge said the work with Shell and GridPoint represents "business model innovation, not just technology innovation."
The big picture: Shell Energy Inside is part of Shell's wider "new energies" division, which is aimed at low-carbon fuels and power. Shell said last year that it's investing $1 billion–$2 billion per year in the new energies division until 2020.