3 keys that can help unlock renewables momentum.

The challenge of providing reliable and affordable #energy was a dominating focus in 2022 and will remain with us in 2023.?I am optimistic about the role renewables can play not just to reduce the CO2 impact of our energy system, but to strengthen energy security as well.

?For it to happen, various parts of society must work together: governments enabling growth and investment through #policy and incentives; companies investing to grow these energy sources; and customers, when they can, choosing lower carbon sources.?

There are some encouraging signs. From the Bipartisan Infrastructure Deal in the US to countries in the Asia-Pacific region taking action to attract more renewables investment, to the urgent focus on renewables within RePowerEU, including a new temporary emergency regulation which will help accelerate permit-granting and deployment of renewable energy projects.

?And companies are stepping up to invest more in low-carbon energy supply, and Shell is no exception. (I've recapped some of our renewables wins in 2022 below).?

But we need more enabling action to build momentum, and here are three areas I believe could make a real difference in unlocking meaningful progress in renewables penetration by 2030:

1.??????Grid capacity and access?

Massive investment is needed in grid infrastructure together with systemic improvement in processes like permitting. And it’s a challenge that needs tackling everywhere from Asia to the United States. Did you know for example that in the United States, some 1,300 gigawatts of potential wind, solar and energy storage projects are in the queue for interconnection access (to connect the renewable power from where it’s generated to the grid where it can be delivered to end customers)? Or that permitting bottlenecks in Asia means it can take up to a decade to build a wind project? ?

As I said, governments are taking steps, but meaningful change requires more urgent action and robust collaboration. This year for example, the countries bordering the North Sea in Europe are expected to deliver their first ever cross-border grid plan. Taking a holistic view and?anticipating capacity needs, they will work together to drive faster implementation at scale and create the conditions that make it feasible for developers to invest in new renewable generation. Shell’s offshore wind presence and interest in the North Sea is growing, bolstered most recently by our success (together with Eneco) in the Hollandse Kust (west) VI tender, and we look forward to seeing the opportunities that come from this collaboration.?

2. System integration?

While most of the solar power supply in the US (80%) is generated between 10am and 5pm, 65% of the power demand falls outside those hours.1 Power is most expensive when demand is at its highest, not to mention the strain on the grid when everyone is powering up at the same time. ?

By integrating complementary solutions like microgrids, battery storage and virtual power plants, consumers can see improved 24/7 access to reliable, low carbon power.?And governments can facilitate this through innovative policies, like offshore wind tender criteria that favours system integration and incentives for building hybrid solar and storage systems. ?

3. Balanced focus on supply and demand?

Incentives to build renewable energy projects have made a huge difference in the growth and affordability of renewable energy over the past 20 years. But incentives for consumers to switch their demand still have some way to go. Many customers are already choosing low carbon options based on a desire to?reduce their impact. But for others, cost premiums and convenience factors act as barriers to switching. Demand-side policies and incentive programs will encourage more consumers to switch and in turn, provide renewable energy developers greater certainty that if they build it, customers will come.?

And why do these measures matter to Shell? Because they are the foundational ingredients to building low-carbon businesses at scale, and where these exist, so do the most competitive opportunities for investment and growth.?

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?Shell’s Renewables highlights from 2022.

This list of course captures only a fraction of the efforts underway, and the possibilities ‘in the hopper’ that I hope to be counting among our successes in the coming year. Behind every one of these examples is a fantastic team driving hard to grow our business rapidly, but also sustainably with a focus on value.

·??????With our JV partner Scottish Power, we won bids to develop 5 GW of floating wind in the UK, where we plan to build and operate two of the world’s first large-scale floating offshore wind farms.

·??????In the US, Atlantic Shores (Shell’s JV with EDF) won a block in the New York Bight offshore wind auction that could support roughly 1.5 gigawatts (GW) of commercial wind generation, enough to power nearly 700,000 New York and New Jersey homes.

·??????We closed Shell’s largest ever renewables deal with the acquisition of Sprng Energy a renewable energy platform in India.

·??????In the Netherlands, Shell and Eneco won a bid to develop 760 MW offshore wind power at Hollandse Kust (west) VI

·??????Shells joint venture with EDF Renewables, Mid-Atlantic Offshore Development, was selected to help develop offshore wind energy transmission in New Jersey.

·??????We completed the acquisition of Daystar Power Group , a provider of integrated solar power solutions in West Africa.

·??????Expanded our Australian renewable energy portfolio through 50% acquisition of Kondinin Energy

·??????Grew our power customer base through acquisitions like Powershop in Australia and by launching Shell Energy in markets like the United States and Netherlands .

·??????We acquired solar-konzept Italia Srl (SKI), as well as a pipeline of solar energy projects across Spain from Green Tie Capital, and 49% of Australian wind farm developer,?WestWind . And we’re in the process of purchasing four solar farm projects currently being developed by Anesco, to help meet growing demand for renewable power in the UK.

·??????We moved forward in our cooperation with Eletrobras in Brazil, signing a technical cooperation agreement to progress development on two potential wind farms, and entered a partnership with Alternergy to explore the vast offshore wind potential in the Philippines.