Shell to divest stakes in U.S. renewable projects to InfraRed Capital

Shell Wind Energy Inc. and Savion Equity, LLC, subsidiaries of Shell plc, have entered into an agreement to sell a significant portion of their ownership in two U.S.-based renewable energy projects to InfraRed Capital Partners.Founded in 2019, Savion is a wholly-owned subsidiary of Shell and operates independently.

Based in Kansas City, Missouri, Savion specialises in developing large-scale solar and energy storage projects across 33 states.Under the terms of the agreement, Shell will divest a 60% interest in Brazos Wind Holdings, LLC, an onshore wind farm located in Fluvanna, Texas. Brazos is currently undergoing a repower and is expected to generate 182 megawatts (MW) once completed in early 2024.

Additionally, Shell will sell a 50% stake in Madison Fields Class B Member, LLC, a solar development project in Madison County, Ohio. Madison Fields is under development, and is expected to generate 180 MW once completed by the end of 2023.

Strategic move aligned with Capital Markets Day Guidance

Glenn Wright, Senior Vice President of Shell Energy Americas, explained that this move aligns with the guidance provided at Shell’s Capital Markets Day. The company aims to dilute ownership in power interests while maintaining access to renewable electrons through select offtake agreements.

“We continue to adopt a disciplined approach within our renewables portfolio, focusing on opportunities where we can integrate across the value chain through trading and optimization,” Wright said.

Offtake and asset management arrangements

As part of the agreement, Shell will retain 100% power offtake from the Brazos project through Shell Energy North America (US) L.P. The Madison Fields solar project will continue with an existing corporate power purchase agreement with a third party. Shell will also serve as the asset manager for both Brazos and Madison Fields projects, which are expected to benefit from Inflation Reduction Act (IRA) tax credits.The transaction for both assets is anticipated to be finalised by early 2024, with an effective date in December 2023.