By Isla Binnie, Andres Gonzalez and Ron Bousso
NEW YORK (Reuters) – Shell’s U.S. solar business Savion has put about a quarter of its assets up for sale, according to a marketing filing and industry sources, as the oil major pulls back from owning renewable energy projects under CEO Wael Sawan.
Investment bank Jefferies is selling up to 10.6 gigawatts (GW) of solar generation and storage assets, or parts of those projects, currently under development, according to a document sent to potential investors and seen by Reuters.
The total value of assets located in the northeast, southeast and west of the United States was unclear. Project valuations often depend on the electricity prices in which they are located.
Spokesmen for Shell and Jefferies declined to comment.
Savion is developing 39.1 GW of solar power and storage projects and has completed more than 2.3 GW of capacity, according to its website.
Shell bought Savion in December 2021 for an undisclosed sum as part of former CEO Ben van Beurden’s drive to grow in the low-carbon energy market and reduce its carbon footprint.
The more than two-year sale is the latest step in Shell’s turnaround under Savan, who has vowed to focus on the most profitable businesses when he takes over in January 2023.
In June, Sawan said Shell wanted to focus on access to low-carbon energy, which it can sell and trade, rather than owning generation assets, where returns are typically lower.
Shell is now focusing on higher margin projects, stable oil production and increasing natural gas production.
Valuations of renewables have fallen, but these assets will play a key role in the energy transition and gain attention as interest rates begin to fall, KPMG said in a report released earlier this month.
The sale of the Dasher US portfolio will allow Savion to “focus on the execution of Shell’s integrated energy markets strategy,” the document said.
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Shell recently sold its retail electricity businesses in the UK and Germany, exited a number of floating offshore wind projects and scaled back its hydrogen business. It is also seeking to exit some refining operations and onshore oil businesses in Nigeria.
Shell also began company-wide layoffs, including at its low-carbon solutions division, to save up to $3 billion.
(Reporting by Isla Binnie in New York and Andres Gonzalez and Ron Bousso in London; Editing by Simon Webb and Chris Reese)