Big Oil lets the sun set on renewables  

The Guardian has an interesting report noting that Shell and BP (Back to Petroleum) seem to be abandoning the greenwashing approach and concentrating on fossil fuels (though Shell does seem to be keeping fingers in the wind and biofuels pies) - "Big Oil lets sun set on renewables".

Shell, the oil company that recently trumpeted its commitment to a low carbon future by signing a pre-Bali conference communique, has quietly sold off most of its solar business. The move, taken with rival BP's decision last week to invest in the world's dirtiest oil production in Canada's tar sands, indicates that Big Oil might be giving up its flirtation with renewables and going back to its roots.

Shell and BP are among the biggest producers of greenhouse gases in the world, but both have been keen to paint themselves green through a series of clean fuel initiatives. BP, under its former chief executive, John Browne, promised to go "beyond petroleum" while Shell has spent millions advertising its serious interest in the future of the environment.

But at a time when interest in solar power is greater than ever, with the world's first "solar city" being built at Phoenix, Arizona, a small announcement from Environ Energy Global of Singapore revealed that it had bought Shell's photovoltaic operations in India and Sri Lanka, with more than 260 staff and 28 offices, for an undisclosed sum.

The sell-off, to be followed by similar ones in the Philippines and Indonesia, comes after another major disposal executed in a low-key way last year, when Shell hived off its solar module production business. The division, with 600 staff and manufacturing plants in the US, Canada and Germany, went to Munich-based SolarWorld. Shell has however formed a manufacturing link, with Saint-Gobain, and promised to build one plant in Germany.

The Anglo-Dutch oil group confirmed yesterday that it had pulled out of its rural business in India and Sri Lanka, saying it was not making enough money. "It was not bringing in any profit for us there so we transferred it to another operator. The buyer will be able to take it to the next level," said a spokeswoman at Shell headquarters in London.

The oil group said it was continuing to move its renewables interests into a mainstream business and hoped to find one new power source that would "achieve materiality" for it. Shell continues to invest in a number of wind farm schemes, such as the London Array offshore scheme, which has government approval. Shell has also been concentrating its efforts on biofuels, but declined to say whether it had given up on solar power even though many smaller rivals continue to believe the technology has a bright future.

Environmental groups have always accused Shell of using clean energy initiatives as "greenwash" to deflect criticism from its core carbon operations, especially tar sands. The latest pull-out has annoyed rival business leaders at London-based Solar Century and local Indian operation, Orb Energy, who fear the impact of a high-profile company selling off solar business. Jeremy Leggett, chief executive of Solarcentury and a leading voice in renewable energy circles, said Shell was undermining the credibility of the business world in its fight against global warming.

"Shell and Solar Century were among the 150 companies that recently signed up to the hard-hitting Bali Declaration. It is vital that companies act consistently with the rhetoric in such declarations, and as I have told Shell senior management on several occasions, an all-out assault on the Canadian tar sands and extracting oil from coal is completely inconsistent with climate protection.

"This latest evidence of half-heartedness or worse in Shell's renewables activities leaves me even more disappointed. Unless fossil-fuel energy companies evolve their core activities meaningfully, we are in deep trouble," he said.

The oil giant is teaming with Hawaii's HR BioPetroleum to construct a pilot facility to grow the next-generation feedstock. The Hague, Netherlands-based Royal Dutch Shell (NYSE: RDS.A), one of the world's largest distributors of first-generation biofuels, has made its latest move into next-generation biofuels, this time going green with algae.

The oil giant formed a joint venture with Hawaii startup HR BioPetroleum to build a pilot facility to grow marine algae and produce vegetable oil for conversion into biofuel.

Shell said it holds a majority share in the new venture, called Cellana, but financial terms of the venture were not disclosed. The company said construction of the new facility is starting immediately on the Kona coast of Hawaii Island, at the Natural Energy Laboratory of Hawaii Authority site. But it might be a while before we see commercial-scale production.

"This will depend on milestones at the two and a half hectare demonstration facility," Olga Gorodilina, a Shell spokesperson, told Cleantech.com. That plant is expected to do research for up to two years. "The next step would be construction of a demonstration-scale commercial facility, let's say 1,000 hectares. All being well, the step after that would be the construction of a full-scale commercial facility of about 20,000 hectares."