Shell Enters the Electricity Market

Royal Dutch Shell to add electricity services to its portfolio

You can be sure of... Shell electricity. The recent liberalisation of the UK’s electricity market has opened the door for new players, great and small. Image by Photocritical (via Shutterstock).

A generation or two ago, the main petroleum companies (Shell, Esso, Texaco, etc) shied away from the electricity market. In the UK, till 1991, electricity boards were a public sector concern. After privatisation, their privatised successors still had a monopoly in their respective areas. Our neck of the woods were served by the YEB. On the other side of the Pennines, there was MANWEB and NORWEB. Back then, Shell was noted (and still noted today) for its petrol stations.

By the start of next year, Shell will be offering electricity services. Initially to business customers in the UK, they aim to expand into the US industrial electricity market. For domestic customers, the move seems unlikely, due to its ramifications for competition. Not only in the supply of our electricity, but also oil prices.

With electric cars due to replace diesel cars in 2040, this could be a strategic position for the oil giant. In future, this could see petrol and diesel pumps replaced by electric car charging points. There could be scope for itemised billing with a car charging component. Either at a Shell garage or on business premises. This is consistent with the company’s move towards natural gas and electric vehicles.

Furthermore, Shell have increased their investment in renewable energy. How long will it be before windmills are seen on the site of oil refineries? This could be a good move for Shell, especially as the time towards Peak Oil gets closer. Could the likes of BP and Esso follow suit?

Mertech Electrical, 21st August 2017.

 

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