Royal Dutch Shell has revealed it is considering opportunities in Australia to combine gas and renewable energy to support the transition to a cleaner economy that chief executive Ben van Beurden describes as "unstoppable".
Mr van Beurden pointed to many areas where the combination of gas and renewables "makes a lot of sense", without elaborating on the types of investments or deals that may result from the strategy.
Speaking to media after the December quarter results released overnight Australian time, chief financial officer Simon Henry singled out Australia, Oman and Brunei as locations where Shell is advancing its "gas-plus-renewables" strategy and examining opportunities.
Shell last year created a separate New Energies" division to invest in renewable and low-carbon power, including biofuels, hydrogen and wind power, and last month led a consortium that won the right to build a 700 megawatt wind farm off the coast of the Netherlands.
Other oil majors such as France's Total SA has made major investments in solar power and batteries, while Denmark's Dong Energy is now the biggest player in offshore wind and this week announced it would become the first major European energy company to commit to becoming entirely coal-free in power generation by 2023.
Mr van Beurden said in London that Shell expected the "new energy" area "grow quite spectacularly" from a small base, alongside increasing demand for oil and gas. Shell would shift its mix of investment to suit.
"We will have to probably change a little bit our energy mix or investment mix to be in line with that transition that underpins that headline demand growth," he said.
The move into cleaner forms of energy would position Shell to benefit from the energy transition.
"We believe climate change is real, we believe action is going to be needed," he said. "We believe we are in the middle of an energy transition that is unstoppable and we want to be at the vanguard of that, we want to be a beneficiary of that energy transition rather than playing a defensive rearguard action role."
Mr van Beurden said that the debate around energy demand was sometimes simplified too much so that it focused too narrowly on electricity growth being supplied with renewable power.
He said that while renewables would indeed play a major role in electricity supply in the future, "for the growth of economies we need both electrons as well as molecules because certain things cannot be done by electrons, we need molecules for it."
Shell Australia chairman Andrew Smith has in the past underscored the importance of gas supply for industries such as chemicals and plastics manufacturing that cannot use a different fuel.
Mr van Beurden said "an integrated offering of gas and renewables" could not just deal with the problem of intermittent generation from the sun and wind, but "give that second leg that a growing economy needs."
"I think is a sensible offering," he said. "It's an offering that we are uniquely placed to do because we can integrate from our gas position in renewables - it's a lot harder to do it the other way round."
