Shell, KKR invest in solar + storage as renewable market booms

Dive Brief:

Oil and gas giant Royal Dutch Shell will expand its renewable portfolio with the acquisition of Kansas City, Missouri-based solar and storage company Savion as more players latch onto the solar and storage sector.
Savion currently has more than 18 GW of solar power and battery storage in development for customers including utilities and commercial facilities. The company will operate under Shell's growing Renewables & Energy Solutions Integrated Power business.
Separately, investment firm KKR announced it would launch Stellar Renewable Power, a platform to source, develop and operate utility-scale solar generation and energy storage.

Dive Insight:

The U.S. solar industry continues to grow, despite rising prices linked to supply chain constraints. The latest U.S. Solar Market Insight report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie found that the U.S. installed 5.4 GW of solar capacity in the third quarter of 2021, including a third quarter record of 3.8 GW of utility-scale solar. The report says that passage of the Build Back Better budget reconciliation package, which includes tax incentives for clean energy, would increase projected deployment by 31% over five years.

The storage industry is likewise booming, with a record 3,515 MWh of new storage in the third quarter, according to the latest data from Wood Mackenzie and the U.S. Energy Storage Association (ESA), leading investors to put significant money into battery startups.

That growth has Shell bullish on solar power, the company said in a release. In February, Shell detailed its plans to be a net-zero energy company by 2050 and has scaled up its renewable offerings. The company says it plans to sell more than 560 TWh of power per year by 2030, double what it does today.

"As one of the fastest-growing, lowest-cost renewable energy sources, solar power is a critical element of our renewables portfolio as we accelerate our drive to net zero,” Wael Sawan, Shell’s integrated gas and renewables & energy solutions director, said in a statement.

Savion, which launched in 2019 out of Enel Green Power North America’s acquisition of Tradewind Energy, is involved in more than 100 projects across 26 states. The company, owned by Macquarie's Green Investment Group, manages end-to-end development for its customers and communities, focusing on solar production linked with storage to collect and dispatch excess power when it is needed.

KKR, meanwhile, is continuing its push into renewable energy investments with the launch of Stellar, which will develop new greenfield projects and acquire assets in development. The investment giant had previously acquired a minority stake in solar energy firm Sol Systems LLC and in June announced a partnership with Crossover Energy Partners to develop solar, wind and storage projects.

The new platform will be led by Vijay Venkatachalam, a former executive with SB Energy Global and SunEdison.

“As long-term investors in renewable energy, we see tremendous potential to build a leading, differentiated solar development platform,” said Anup Agarwal, chief investment officer of KKR subsidiary Global Atlantic, in a statement. Stellar, he added “will be well-positioned to capitalize on the significant growth opportunities that we are seeing in this space.”