Shell's U-turn denial over ScotWind sale reports in wake of £22bn profit

Labour tabled its blueprint amid reports Shell is to sell on its two floating wind projects it won through the ScotWind auction alongside Scottish Power, despite receiving funding this week from SNP ministers to accelerate the energy transition through the Acorn carbon capture scheme.

The company, which made £22.3 billion profit last year, has insisted it remains “wholly committed” to the green energy transition amid accusations oil and gas giants “cannot be trusted when it comes to climate action or a just transition”.

The UK government has set out its proposals for GB Energy and has confirmed it is in discussion with SNP ministers at Holyrood and Crown Estate Scotland to support new clean energy technology.

Labour’s plans for GB Energy have been backed with £8.3 billion to own and invest in clean power projects in Scotland and across the UK as the Prime Minister repeated his vow that "Scotland will lead the clean energy revolution".

The UK government is also in discussions with the Scottish Government and Crown Estate Scotland over how GB Energy could help to support development and investment within Scotland. This follows the announcement of a new partnership between GB Energy and the Crown Estate, which has the potential to leverage up to £60 billion of private investment into the UK’s drive for energy independence.

The UK government is still yet to announce where in Scotland GB Energy will be headquartered.

But the announcement comes amid reports suggesting Shell could sell on two floating wind projects it won through the ScotWind auction process in 2022, in partnership with Scottish Power, totalling 5GW.

The MarramWind project is 75km off the Scottish coast and could deliver up to 3GW of clean power while the CampionWind development, 100km off the Scottish east coast, could produce 2GW of renewable energy.

The reports Shell is looking to offload the investment heaps pressure on the new Labour UK government as it sets out its £8.3 billion plans to set up publicly-owned GB Energy in Scotland.

Earlier this week, the Scottish Government announced £2 million of funding to the Acorn carbon capture project, of which Shell is a key partner, with First Minister John Swinney insisting the scheme is "essential".

Friends of the Earth Scotland just transition campaigner, Rosie Hampton, said: “Shell is showing once again that it cannot be trusted when it comes to climate action or a just transition.

“Its priorities are still drilling for as much dirty fossil fuel as possible regardless of the devastating climate impacts. It remains a partner in a Scottish carbon capture greenwash scheme at Acorn but it has cut and run from renewable energy.”

She added: "Offshore wind is exactly what Labour’s GB Energy should be investing in. This is an early test for Keir Starmer’s climate credentials and an opportunity for GB Energy to hit the ground running. The UK Government should put its money where its mouth is and enable GB Energy to buy these ScotWind shares from Shell.

"Putting ownership of renewable energy into public hands would ensure that the UK public are benefiting from the vital offshore wind sector and that the wider social benefits can be achieved and distributed fairly across communities.”

Crown Estate Scotland, which oversees the ScotWind leasing projects, stressed that companies that win auctions “have the right to alter ownership structures”, although “they generally require our consent”.

A spokesman added: “Such changes are a normal feature of offshore wind development and are treated on their individual merits when being assessed by Crown Estate Scotland.

“We continue to work closely with all ScotWind partners and are providing all appropriate support to help ensure the success of this leasing round, which is central to Scotland’s efforts to tackle the climate emergency, secure the UK’s energy supply, and which could generate billions of pounds of investment in Scotland.“

Scottish Power insisted that it was still committed to the projects.

A Scottish Power spokesperson said: “We only produce clean, green energy and these are key offshore wind projects, which are a critically important part of the UK’s future energy security and offshore wind ambitions.

“We are fully committed to these projects and continue to progress them.”

Shell said it was unable to comment on investment decisions but pointed to £4.3 billion of investment in 2023 on low-carbon measures, almost one quarter of the company’s total capital spending.

A Shell spokesman said: “Shell is wholly committed to becoming a net zero emissions energy business by 2050, and taking clear action to be the investment case and partner of choice through the energy transition.”

A Scottish Government spokesman said it would be “inappropriate to comment on private commercial arrangements”.

He added: “A strong pipeline of port infrastructure and supply chain projects to support the offshore wind sector has emerged through the Strategic Investment Model (SIM) process with a combined total capital expenditure of around £6.5 billion.

“Recent significant investments include Sumitomo Electric’s £350 million inward investment to deliver a new high voltage direct current (HVDC) cable manufacturing facility in Nigg and the £100m joint Scottish National Investment Bank and UK Investment Bank investment into Ardersier Port.”

The UK government’s GB Energy will have five key functions - project development, project investment alongside the private sector, local power plans to supporting local energy generation projects, building supply chains and exploring new nuclear power opportunities.

The Great British Energy Bill, being introduced in the House of Commons today, will support the creation of the new publicly owned company by setting out its objectives and ensuring it has access to necessary finances.

Prime Minister Keir Starmer said: “Scotland will lead the clean energy revolution in the United Kingdom, fuelled by the skills, knowledge, and talented workforce the energy sector here contains.

“That’s why we’re headquartering GB Energy in Scotland, and today’s announcement takes us a step closer to achieving that. Clean energy by 2030, cheaper bills, and good jobs across the country.”

The Scottish Government’s acting Cabinet Secretary for Net Zero and Energy, Gillian Martin said: “Scotland has an established track record in promoting renewable energy. We are at the forefront of the development of renewables technology and export a significant portion of our energy, particularly from wind power.

“I welcome that this has been recognised by the UK government.

“In our initial engagements with the UK government, we have made clear our expectations that GB Energy must deliver real benefits for the people of Scotland and support our ongoing efforts for a just transition and to reach net zero by 2045.

“Whilst there is a great deal of agreement between the two governments on many of the priorities that have been identified, one area where we diverge is on new nuclear power stations. We are clear that UK government’s intended investment in nuclear should instead be used to bolster further renewables.”