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Shell enters market big time via America -- Oil giant negotiating ownership of 50 MW Wyoming project

Just three months after announcing its intentions to become a major player in the wind power industry, Shell is making its entrance on the American wind market. The giant global oil company is negotiating to buy into a 50 MW wind farm in Wyoming. The project is being developed by SeaWest of California, a company with nearly two decades of experience in wind power development. The wind plant's output will be bought by PacifiCorp Power Marketing's retail business, which serves about 1.4 million customers in six US states.

Shell's involvement in the Rock River I project has yet to be officially announced. For some weeks, however, Shell Renewables has publicly said it is taking a stake in a 50 MW project in the Midwest of the United States. This was confirmed last month by Shell Renewables wind energy development manager, Huub den Rooijen. He declines to comment, however, on the actual project or the partners involved, as do SeaWest and PacifiCorp.

Rock River I, to consist of 50 Mitsubishi 1 MW wind turbines from Japan, will be an extension of the established Foote Creek Rim wind farm. In building the plant, PacifiCorp is fulfilling an agreement made with the Oregon Public Utility Commission to develop 50 MW of a renewable resource within five years. The agreement was part of the approval for its merger with British-owned Scottish Power in 1999. Shell is currently working with Scottish power on site investigations for 90 MW of wind power off the north west coast of England (Windpower Monthly, May 2001). Through Rock River, both companies now have wind industry links with another global heavyweight, Mitsubishi.

Significant player

The arrival of Shell in the midst of the booming market for wind plant in power-hungry America is a significant sign of the times. Until now Shell's activities in wind have been limited to its 33% ownership of the small Blyth offshore plant off the north east coast of England and the installation of two turbines at its Harburg refinery in Germany. Both projects stem from last year. Blyth consists of two Vestas 2 MW turbines, while two Enercon units, with a combined output of 3.6 MW, feed power to the Harburg grid.

The step-up from these small beginnings to a major commercial wind project in the US suggests Shell -- which now calls itself an energy company, not an oil company -- is now putting words into action. Indeed, over past weeks it has used the Blyth wind farm to project its new green credentials in a series of press advertisements in influential business publications. It was only two years ago that Royal Dutch/Shell Group managing director Jeroem van der Veer told this magazine that he could see no opening for Shell in wind power. At the time the company's renewable energy activities were concentrated on solar and biomass.

Den Rooijen agrees that the company has changed course. Two years ago, he says, Shell was unsure about where the opportunities lay in the renewables sector. That is no longer the case. "Shell has made a decision to become a major player in wind power development based on the size of the future market, based on current growth rates and the increasing size of wind power plant," he says. The aim for the company is to become "a first tier player" in the wind business within five years with a "substantial portfolio "worldwide." We see this as being a genuine business opportunity. We are convinced as a company that wind power is on a growth path that will mimic the growth path of oil," says Den Rooijen.

His words echo those of Shell Renewables executive vice president David Jones in late February, though are an even firmer statement of intent. Jones spoke at a wind seminar held in Aberdeen, heartland of the offshore gas and oil industry (Windpower Monthly, April 2001).

Aside from the Wyoming deal, Shell's wind activities so far are mainly related to involvement in offshore wind plant plans. It has been granted one of 18 leases to investigate offshore sites off Britain, it is part of the Nordzeewind consortium proposing to develop a 100 MW "near-shore" wind plant off the Netherlands, and it is looking at 12 MW off France. Furthermore, it has bid on a 200 MW wind tender issued by the Moroccan utility, which has drawn up a shortlist of five, and is looking at 100 MW plus of "other projects," says Den Rooijen.

Shell sees a multi-faceted role for itself in wind power from site identification and evaluation through to project design, construction, operation and ownership. It will not make wind turbines and is not interested in projects smaller than 20 MW, or sites with wind speeds of less than 7.5 m/s, the company states.

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