Oil and petroleum giant Shell says it will acquire Australian power provider Powershop, months after a landmark court ruling forced the Dutch energy conglomerate to accelerate its plan to reach net zero carbon emissions.
On Monday, Shell announced it will partner with Infrastructure Capital Group to take over Powershop via a total acquisition of its parent company, Meridian Energy Australia Group.
The deal will see Shell own a company which currently provides electricity to 185,000 customers across New South Wales, Victoria, South Australia, and the south-east corner of Queensland.
In Powershop, Shell will acquire a brand which offers carbon offsets for 100% of the power it provides, a major selling point for consumers conscious of their environmental impact.
Meridian Energy also owns and operates a number of wind farms and hydro-electric power generators across the country, which will come under Infrastructure Capital Group ownership through the deal.
The Australian Financial Review reports the deal is estimated to cost $729 million, representing a major domestic investment for both firms as they delve further into green energy and domestic electricity services.
“Our aim is to become a leading provider of clean power-as-a-service and this acquisition broadens our customer portfolio in Australia to include households,” Shell’s executive vice president of renewables and energy solutions Elisabeth Brinton said in a statement.
The deal comes just months after a Dutch court ruled the Netherlands-based company must boost its plan to cut its net carbon emissions, with Shell’s prior targets deemed insufficient.
Under its original plan, Shell vowed to cut its emissions by 20% of 2019 levels by the end of the decade. The ruling means the company is now required to carve away 45% of its emissions by 2030, before it hits net zero in 2050.
The ruling marked a precedent not just for Shell, but other major oil and petroleum companies whose primary products result in massive greenhouse gas emissions and contribute to climate change.
The Powershop acquisition will help Shell deliver “simple, cleaner energy solutions,” Brinton added, suggesting the acquisition is an attempt to diversify the company’s power portfolio while bolstering its green credentials.
Shell has already declared interest in local carbon farming operations, solar power plants, and home battery system providers, as major energy producers face investor concerns and increasing global scrutiny.
However, the Powershop acquisition does not signal any immediate abandonment of Shell’s enormous fossil fuel concerns.
A month after the May court ruling, Shell announced its decision to appeal, arguing that a decision impacting only one company is not the way to facilitate deeper cuts to global carbon emissions.
Shell only “believes” its total carbon emissions peaked in 2018 and its oil production topped out in 2019, CEO Ben van Beurden said in June.
And in his own post-verdict speech, Shell Australia chairman Tony Nunan said the “solution” sat somewhere between ending fossil fuel usage as soon as soon as possible and “just supplying what customers need” into the future.
Shell said it expects to Powershop acquisition to be completed in early 2022, pending regulatory approval.