Royal Dutch Shell's Shell Overseas Investments BV will acquire 100% of virtual power plant (VPP) operator from Germany Next Kraftwerke for an undisclosed sum. The deal is expected to be concluded in Q2/2021.
Shell says this acquisition is aligned with the group's digitized, customer-centric strategy for the electricity sector as it aims to double its electricity business to around 560 TWh by 2030. "The acquisition of Next Kraftwerke will accelerate Shell's strategy of expanding its portfolio by acquiring smaller companies in the renewable energy sector. The combined expertise of both companies will also make it possible to facilitate the hedging and risk management of large renewable energy projects," said Shell Energy Europe's Vice President, David Wells.
Next Kraftwerke, shared Shell, controls over 10,000 decentralized energy units—including solar PV, bioenergy and hydropower—in Germany, Belgium, Austria, France, Poland, the Netherlands, Switzerland and Italy. It then trades this green electricity on behalf of its customers on the electricity wholesale markets.
The Cologne, Germany based company sees this partnership as bringing it access to resources to expand and for more complex trading products.
"We support Germany's ambition to become a net zero emissions country. The electricity market is the key to this, and we are paving the way with our range of green electricity for industrial partners and private households, the company's high-tech battery storage system and the steady growth of our EV charging network at home, at work, on the road and on our gas stations," added Deutsche Shell Holding GmbH CEO Dr. Fabian Ziegler.
In its recent strategy document for 2050 called Powering Progress, Shell provided a strategy update for its net zero carbon emissions target saying it will invest $2 billion to $3 billion annually on renewables and energy solutions while saving the lion's share for oil business (see Shell To Invest In Renewables, But More On Oil & Gas).
Shell previously acquired another German company, energy storage provider sonnen, becoming its 100% stakeholder (see Shell Takes Over 100% Of Sonnen).
In November 2020, Next Kraftwerke launched its joint venture with Toshiba Energy Systems & Solutions Corporation (Toshiba ESS) as a VPP service provider to enable 3rd parties in Japan to set up their own VPPs. The new entity is called Next Kraftwerke Toshiba Corporation.