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Shell technology ventures into cleantech markets

The focus right now is on Royal Dutch Shell, which on Thursday announced it would open a China branch of its venture fund, Shell Technology Ventures. The announcement comes just two weeks after the oil and gas company launched a Singapore-based accelerator called IdeaRefinery supporting energy-related technology startups.

Like the Singapore accelerator, the venture arm in China will be searching for profitable startups, particularly in the areas of smart mobility, battery storage and solar power generation for microgrids. This represents a big switch from the venture fund’s historical oil-centered investments.

Offshore opportunity
Additionally, Shell is also interested in the global development of offshore wind. Royal Dutch Shell commercial director, Hessel de Jong said many countries around the North Sea have no clear agenda over what they will be doing after 2022. “We are very interested to talk to countries who are thinking about collaborative development efforts. You’re going to have to work with other countries, so why not do so now?”

But Shell is not interested in developing offshore windfarms to flip them. De Jong said the results of the recent contracts for difference auction in the U.K. were “surprising and instructive” for the group. “We can now back calculate what kind of tricks [the winning bids] threw in there and close the gap, and actually win the next,” said.

An employee at the Shell Agbada 2 flow station looks at the station from behind a gate in Port Harco...

An employee at the Shell Agbada 2 flow station looks at the station from behind a gate in Port Harcourt on September 30, 2015
Florian Plaucheur, AFP/File

Investing in disruptive technologies
Shell Technology Ventures (STV), internally known as “Stevie,” was started in 1998 as a way for the oil and gas company to stay on top of technology changes in the energy market. But the recent shift in the fund’s interests has not gone unnoticed.

“The Chinese venture market is booming, exploding is a better word,” STV Managing Director Geert van de Wouw told Reuters in an interview in Amsterdam. “What you see now is Chinese engineers based in Silicon Valley and Europe that see market opportunities and go back to China to set up their own shops.”

It’s hard getting anyone to give a definite size on the venture fund, and Van de Wouw was no exception. He did mention that STV typically invested $2.5 million to $5 million during the initial investment phase, with up to $20 million over the full investment lifecycle.

And as renewable energy technologies continue to disrupt the mainstream electrification order, traditional energy companies like Shell are forced to explore new business models or be left behind. This is a good example of the disruption to the economy that took place with the introduction of the Internet and Dot-com companies in the 1990s. Each major shift included winners and losers — and STV shows that Shell is determined not to become part of the latter.

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We are deeply saddened to announce the passing of our dear friend Karen Graham, who served as Editor-at-Large at Digital Journal. She was 78 years old. Karen's view of what is happening in our world was colored by her love of history and how the past influences events taking place today. Her belief in humankind's part in the care of the planet and our environment has led her to focus on the need for action in dealing with climate change. It was said by Geoffrey C. Ward, "Journalism is merely history's first draft." Everyone who writes about what is happening today is indeed, writing a small part of our history.

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