Oil giant Shell has announced that it has acquired a 43.83% interest in American solar company Silicon Ranch Corporation. The deal, reportedly valued between $193m and $217m, is its first significant investment into renewable energy since pledging to do so in December 2017.
“Partnering with Silicon Ranch Corporation progresses our New Energies strategy and provides our US customers with additional solar renewable options,” said Shell vice president of solar Marc van Gerven. “With this entry into the fast-growing solar sector, Shell is able to leverage its expertise as one of the top three wholesale power sellers in the US, while expanding its global New Energies footprint.”
Based in Nashville, Tennessee, Silicon Ranch owns or operates over 100 solar energy sites across 14 states in the US, and claims to have generated 628m kW/h of energy and saved over 441,000t of greenhouse gas emissions through its installations.
Shell has become the largest shareholder in Silicon Ranch, and reports that it expects the deal to be completed in Q1 of this year. A separate agreement is in place where Shell can increase its ownership of Silicon Ranch after 2021.
“There is such an economic driver, as well as consumer interest, in renewables that solar is quickly becoming a much more sought after energy generations source,” Silicon Ranch CEO Matt Kisber told the Tennessean.
The acquisition has been interpreted by some as evidence of Shell’s resurgence following the collapse of oil prices to $28.64 per barrel in January 2016, and the resulting decline of the price of Shell shares to $26.03 in the same month.
The company’s income increased significantly from $1.375bn in Q3 2016 to $4.097bn in Q3 2017, leading CEO Ben van Beurden to conclude that “our strategy is working”.
The Silicon Ranch deal is one of several recent moves by the company to diversify their services and invest in new areas. Shell recently announced its intention to build its first offshore production, storage and offloading vessel in the North Sea in almost thirty years, which is expected to produce up to 45,000 barrels of oil per day.
It has also increased its efforts regarding the extraction of shale gas, and expects to double its earnings within two years to between $3.5bn and $4bn by incorporating what it dubs “unconventional resources” into its portfolio.