Royal Dutch Shell announced the planned opening of two additional hydrogen stations in the US and the signing of Memorandums of Understanding (MoUs) for wind projects in China and solar energy development with Saint-Gobain.
The announcement came in conjunction with the release of the energy company’s earnings for 2005: US$25.3 billion, up 37% from 2004. Its upstream production of oil and gas, however, dropped 6.7% from 2004 to 2005. That figure includes a drop in crude production of 8% from 2.253 million barrels per day (mbpd) to 2.093, and a drop in natural gas production of 6% from 8.808 billion standard cubic feet per day (bscfpd) to 8.263.
Excluding special factors such as the loss of production due to hurricanes in the Gulf of Mexico, the end of a production sharing contract in the Middle East, lower entitlements due to higher hydrocarbon prices and the impact of divestments, production would have been 1% lower than a year ago.
The company expects its total Reserves Replacement Ratio (the amount of new oil and gas discovered relative to what was produced) for 2005 to be in the range of 70%-80%, including mineable reserves from Athabasca Oils Sands and also including year-end pricing impact and acquisitions and divestments. For Group companies, without associates, the company expects its Reserves Replacement Ratio for 2005 to be in the range of 65%-75%.
Shell took the opportunity of its announcements of the hydrogen stations and wind and solar MoUs to provide an update on its activities in alternative energy including biofuels, wind, solar and hydrogen.
Shell has now invested more than US$1 billion in alternative energies, making it one of the world’s leading companies in the sector.
In Shell, we aim to develop at least one alternative energy such as wind, hydrogen or advanced solar technology, into a substantial business. In addition, we continue our efforts to further expand our position as the largest marketer of biofuels.—Shell CEO Jeroen van der Veer
Biofuels. Shell is the world’s largest marketer of biofuels, as well as a leading developer of advanced biofuels technologies. Shell is partnering with Iogen on the development processes to produce cellulosic ethanol and recently announced a Memorandum of Understanding with Volkswagen and Iogen to explore the economic feasibility of producing cellulose ethanol in Germany. (Earlier post.)
Shell also has a partnership with CHOREN Industries of Germany to develop Biomass-to-Liquids technology that uses CHOREN’s gasification process as a front-end to Shell’s Gas-to-Liquids technology. CHOREN is preparing construction for the world’s first commercial biomass-to-liquids facility in Freiberg, Germany.
Wind. Shell’s share of wind energy capacity is currently greater than 350MW, and is expected to reach approximately 500MW in 2007. Included in this growth is the first Dutch offshore wind project, the 108MW Offshore Windpark Egmond aan Zee (Shell share: 50%). Full construction will begin on this project in March 2006, and first electricity production is expected around the end of the year. Progress has also been made with the development of the London Array offshore project in the UK (Shell share: 33.3%). This project has a potential capacity of 1,000MW, making it one of the world’s largest planned wind farms.
In the United States, Shell is already one of the largest wind energy developers, and is actively progressing projects in Texas, Wyoming, Idaho, West Virginia, California, and Hawaii. Shell recently acquired the development rights to Mount Storm, a 300MW wind park (Shell share: 50%) in West Virginia—potentially one of the largest new projects in the USA. Progress has also been made in permitting the 200MW Cotterel Mountain wind project (Shell share: 50%) in Idaho.
Shell announced a Memorandum of Understanding outlining plans to explore the potential for wind energy developments in China in partnership with Guohua Energy Investment Corporation of the China Shenhua Group, a leading national energy supplier.
Solar. In the area of Solar energy, Shell has been working with the next generation of technologies, including CIS (Copper Indium Diselenide) thin-film. Shell believes that non-silicon based technologies such as CIS are more likely to become competitive with retail electricity in the coming years. The technology recently achieved a 13.5% world record efficiency for thin-film products.
Shell announced the signing of a Memorandum of Understanding with Saint-Gobain, one of the world’s leading producers of glass and other building materials, to further explore the Shell CIS technology and consider joint development.
In light of its focus on CIS technology, Shell divested its crystalline silicon solar business activities to SolarWorld AG. Shell’s silicon-based business has an annual production of approximately 80MW. Manufacturing facilities, sales and marketing, and silicon research and development activities in Germany and the United States (Washington state and California) will transfer to SolarWorld, including all 579 staff currently involved in silicon PV.
Hydrogen. In addition to the two new hydrogen stations in the US, Shell is also supporting the recently announced Hydrogen station at Tongji University in Shanghai.