Shell: Hydrogen, One of Five Ways to Accelerate the UK Energy Transition

By June 9, 2022 10   min read  (1947 words)

June 9, 2022 |

Fuel Cells Works, Shell: Hydrogen, One of Five Ways to Accelerate the UK Energy Transition

Speaking at Shell’s Powering Progress UK Summit for staff and contractors, Ben van Beurden, Shell’s Chief Executive Officer, sets out five ambitions that will accelerate Shell’s energy transition in the UK.

Fuel Cells Works, Shell: Hydrogen, One of Five Ways to Accelerate the UK Energy Transition

Shell’s EV-only charging hub in Fulham, London

I am so glad you have all joined us today. This is a wonderful opportunity to meet so many of the UK teams after the company’s move to London. And it is the day Shell UK presents its goals for the coming years… with exciting news I’ll come to in a minute.

So for me, this is a big day because Shell is making an acceleration of its plans in the UK. We are going to go faster. I believe this is necessary at this time of great uncertainty and change.

From anxiety for many over the cost of living, to replacing Russian oil and gas with a secure and reliable supply, to the increasingly urgent need to tackle climate change. These challenges require many different solutions to make sure people have a secure supply of reliable, sustainable and affordable energy.

Going faster

This means we need to move our societies, our lives, away from a dependence on fossil fuels in a responsible, balanced way. At the same time, it is also absolutely clear this energy transition needs to go faster. And I want all of you to know that Shell, and of course including Shell UK, will play a leading role in this acceleration.

We want to be a pacesetter. In fact, accelerating the energy transition is at the heart of Powering Progress, our strategy to become a net-zero emissions energy business by 2050. Our current operating plans will have to change to achieve this target, so we can continue to supply the energy the world needs right now, while we also help to build the energy system of the future.

Let me give some examples of how so many of you, Shell colleagues, have been making this crucial change happen here in the UK. Just a short drive from here, on Fulham Road, in south-west London, you will find our first electric vehicle-only charging hub in London. This is the first time we have swapped all our petrol and diesel pumps at a site for ultra-rapid charge points.

If you drive from here to the banks of the River Humber in Lincolnshire, you’ll probably come across Uniper’s Killingholme power station site, where we are exploring the feasibility of producing hydrogen from natural gas.

Floating wind in Scotland

Further north, we won bids at the beginning of this year to develop 5 gigawatts of floating wind power off the east and north-east coast of Scotland.

This is enough energy to power 6 million homes… which is more than double the number of homes in Scotland. We seek to combine this with the Acorn carbon capture and storage and hydrogen project in Aberdeenshire. If built, with our partners, this could help make our St Fergus gas terminal the heart of Scottish CCS and hydrogen.

We are also working on our new Aberdeen energy hub. This will be the basis of our Upstream organization and will house pioneers with decades long track-records in oil and gas who have built our UK energy business. This expertise and experience will help us with the huge task of continuing to supply the oil and gas the country needs, while making CCS, hydrogen and offshore floating wind a reality.

These are some examples of what I mean when I say that at Shell, we will accelerate our change and seek to lead in the world’s energy transition.

Working with others

There are more examples. Our target to achieve net-zero emissions by 2050 is no longer linked to society’s progress. Does this mean we can do it all alone? Certainly not. If society does not achieve net-zero emissions in 2050, there would be significant risk that Shell may not meet this target.

So we need to work together with our customers, with businesses like Dame Sharon’s John Lewis Partnership, and with Mr Kwarteng’s government.

We need, for example, bold policies and regulations that enable technologies like carbon capture and storage, mandate sustainable aviation fuels and accelerate and synchronise the supply and demand of low-carbon energy. At Shell, we need all these policies… and more. But we will not wait for all of them to be in place before we move. Because the world needs action now, if we want an energy transition with both a secure supply of energy and lower emissions.

So, we will not wait, and we have been making crucial investments in low- and zero carbon energy such as wind and solar power, hydrogen, biofuels, charging infrastructure for electric vehicles… and many ways to reduce emissions from oil and gas.

And this is not all, we are preparing many more investments in the UK. In fact, as announced earlier, over the next 10 years, Shell UK plans to invest £20-25 billion in the UK energy system. And we will use this investment to accelerate progress. Accelerating progress requires businesses and governments to play their roles.

For businesses to achieve ambitious long-term plans and actions, they need governments to put the policies in place to make these ambitions possible. When planning for the next decade and beyond in the UK, for example, businesses need to be able to rely on stable fiscal policies that incentivise investment in both North Sea oil and gas and a renewable energy system.

Five clear UK ambitions

I’m sure we will be discussing this in more detail with the Secretary of State. But for now, let me return to the role Shell UK intends to play in accelerating progress, and the exciting news I mentioned ─ because today we are outlining our five ambitions for the UK until 2030, two of which you already know, and three new ones.

Together, they help both Shell and the UK become stronger and more sustainable. Our first ambition is to continue to supply the oil and gas which the country needs, as we have been doing since the discovery of the Brent field some fifty years ago.

Today, we are responsible for about 10% of the nation’s oil and gas supply. We aim to increase this to about 15% by 2030. And to do this while producing only half the amount of our operational emissions by 2030, compared with 2018.

Such responsibly produced, local gas plays an essential role in the UK’s energy security and transition to net-zero emissions and is in line with the North Sea Transition Deal between the UK government and the offshore oil and gas industry. Responsibly produced gas is also consistent with our strategic goal to become a net-zero emissions business by 2050 ─ in fact, it is crucial if we want to supply the energy the world needs right now, while we also help to build the energy system of the future.

Last week, UK regulators approved our Jackdaw gas project in the North Sea, which has the potential to produce 6.5% of the UK’s gas output. We will now move ahead with this project, as well as with other similar ones. In fact, we have an interest in six of the UK’s twelve planned exploration wells.

But as I just said, investments in projects like these require a stable fiscal policy… and we continue to look to the government for those assurances.

This is also true for our second ambition, which is to spend more than 75% of the £20-25 billion on the development of low- and zero carbon energy products and services, including offshore wind, hydrogen, charging infrastructure for electric cars and carbon capture and storage, to give British businesses access to clean energy.

To this end we are working together with businesses and industry, especially in sectors that cannot easily use electricity and have a hard time finding a path to net-zero emissions, like aviation, heavy-duty road freight, shipping and the production of steel, cement and chemicals.

We have, for example, signed a memorandum of understanding with Hanson, the UK’s largest supplier of low-carbon concrete. We are planning to help lower their emissions with a suite of solutions including hydrogen, biofuels and carbon capture and storage.

Our third ambition is to have, by 2030, more than 100,000 public charging points for electric vehicles in the UK, so that 90% of drivers are within 10 minutes of a Shell rapid charger. Today, we have 5,250 charging points. By adding thousands and thousands more chargers, we are going to help accelerate the adoption of electric vehicles in the UK.

Changing energy supply in this way is crucial… but changing supply alone will not be enough. Because if the energy transition is to happen at the speed and scale necessary to tackle climate change, supply and demand both have to change.

I just told you about our electric-vehicle charging hub on the Fulham Road. It is great… and I think it will help convince people to switch to an electric car, but I have no illusions that it will convince everyone in London to buy an electric car.

Even if we would swap all our petrol and diesel pumps at all our sites in the UK for charge points tomorrow, that would not mean everyone in the UK would cease to buy petrol.

It would mean people would drive to our filling stations, get out of their car, probably swear, get back into their car, and drive to one of our competitors to buy petrol or diesel.

Demand for fossil fuels would not change, despite the fact we would have changed our supply dramatically. We simply cannot force our customers to buy an electric car… but we can work with our customers to help them switch to low- and zero-carbon energy. And this is why we have made working with our customers an essential part of Shell’s strategy, globally, and here in the UK.

I’ve already told you how we are going to work together with British businesses to give them access to clean energy. In the same way, our fourth ambition is to provide renewable power for 5 million customers by 2030 from 1.4 million today.

We can achieve this because our business is integrated. We do everything… from generation to production… and from trading to supplying power for mobility and homes.

So we are ready to become the one-stop-shop for more and cleaner energy. Beyond increasing energy security and cleaner energy, we will also help strengthen the UK’s economy.

That brings me to the last of the five new ambitions, which is to invest 100 million pounds by 2030 to help 15,000 people get skilled jobs.

For example, by establishing Energy Transition Skills Programmes and Centres to help people across communities in the UK to develop skills that will be valuable in the energy transition… like training electricians to install electric vehicle chargers…

There you have it.

Five clear ambitions.

We are investing in reducing emissions from supplying oil and gas. We are investing to grow low- and zero carbon energy and fast charging points. And we are investing in renewable power and sustainable jobs.

None of these steps will get the UK or Shell to net-zero emissions immediately, but these ambitions will move us forward… they will speed up progress and you will hear more about them from David [Bunch, UK Country Chair] and the UK team later in the session.

And I look forward to working on this progress with businesses like John Lewis Partnership, the UK government and all our wonderful Shell colleagues to make the UK stronger and more sustainable.

Thank you.

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