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.
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.
