Shell has agreed to sell its onshore renewable energy business in Europe to French energy major TotalEnergies, in the latest move by the British oil company to scale back its exposure to
renewables and concentrate on oil, gas and energy trading.
The deal covers renewable energy assets in Italy, the Netherlands, Spain and the United Kingdom. The companies did not disclose the value of the transaction.
The sale is part of Chief Executive Wael Sawan's strategy to improve returns by prioritising Shell's core oil and gas operations and reducing investment in lower-return low-carbon businesses.
The transaction, which is expected to close by the end of 2026, includes about 500 megawatts of solar and wind capacity that is either operating or under construction, mainly in Italy and the Netherlands, TotalEnergies said.
It also includes a development pipeline of about 3.5 gigawatts of solar, wind and battery-storage projects across Italy, Britain and Spain.
Shell had about 4.5 gigawatts of renewable power generation capacity in operation at the end of the second quarter.
The company has increasingly focused its power strategy on supplying large customers with integrated energy solutions that combine renewable electricity with more reliable, hydrocarbon-based generation.
Shell's renewed focus on its traditional businesses comes as higher energy prices and strong liquefied natural gas trading have boosted its financial performance. The company reported that second-quarter profit more than doubled from a year earlier, reaching its second-highest level on record.
Adjusted earnings from Shell's renewables and energy solutions division rose to $79 million from a $9 million loss a year earlier.
Britain's BP is pursuing a similar strategy, cutting back on renewable energy investments and placing greater emphasis on oil and gas production.
For TotalEnergies, the acquisition expands its renewable power portfolio in several key European markets.
The French company also announced separately that it had agreed to sell a 50% stake in a 1.2-gigawatt European renewable energy portfolio to investment firm KKR. The transaction values the portfolio at €1.8 billion ($2.08 billion).
TotalEnergies said the two deals were consistent with its strategy of expanding renewable and gas-fired power generation in deregulated electricity markets while selling stakes in renewable assets and crystallising gains.
The company's European renewable portfolio now comprises almost 10 gigawatts of gross installed capacity or projects under construction, with a further 27 gigawatts in development. Photo by Coolcaesar, Wikimedia commons.
