Shell is doubling its annual investment in “green energy” to $4 billion (£3.1 billion), investing in solar energy technology and buying First Utility, a UK electricity distributor which promises consumers that all its power is generated from renewables.
These efforts are about dipping toes in the pond — Shell invests $25 billion a year. Green energy is a small part of the capital budget for the good reason that big oil cannot afford to get it wrong.
Too many pensioners depend on these firms for income, too many jobs and too much tax revenue is at stake. A leap in the dark towards the renewable future is a job for Government. It is about state command and control. It is not a commercial play for a BP or a Shell.
If you think that is cowardly, consider the brave. Tesla, the electric car-maker, suffered a huge loss in the first quarter of this year and said it would need to raise $2.4 billion to keep the show on the road.
One of the problems with the business founded by Elon Musk is that for all its vaunted innovation, there is nothing much new in a Tesla. It’s a plastic and metal carriage with wheels, electric motors and a battery which is far too expensive to be considered a mass transport solution.
For a Shell or an Exxon to get excited enough to bet the farm, the solution must be workable as mass-market infrastructure. Wind energy is part of the solution for Britain where a stiff offshore breeze can boost its contribution to between 20% and 25% of generation.
Wind and combined cycle gas turbines have almost eliminated coal-fired electricity generation but the big problem is heating our homes. We need vast amounts of electricity storage capacity to remove natural gas from the equation; efficient, low-cost technology is not yet there.
Investors want pain-free solutions, just like the protesters chanting in the streets. There are none, just a range of options that involve risk, huge expense and little assurance of the long-term reward on which your pension depends.
