Global oil company Shell is studying how to start investing in renewables projects in Brazil through its local subsidiary, and may participate in the upcoming power tender at the end of August.

“Brazilian society needs energy, and as a global company we are looking and there are people [in our company] looking at the option of participating in the tender,” Shell’s Brazil manager André Araújo told reporters after presenting the company’s Sky scenario for 2070 in Rio de Janeiro.

“If we have put renewables in our radar we must be ready to take the risk,” Araújo said, declining to give further details.

His remarks moves the oil major a step forward in renewables in Brazil, where it operates in fuel distribution and oil exploration and production.

Alongside a number of other oil and gas majors, Shell is investing in offshore wind, batteries, electric vehicles and other renewable energy technologies. But the announcement made by its Brazil manager has put the country firmly with the company’s $1bn-$2bn annual investment budget allocated to Shell New Energies.

With its recent concessions and discoveries in Brazil’s offshore oil sector – sometimes partnering with other companies such as federal oil company Petrobras – Shell is looking at supplying natural gas from the pre-salt oil reserves in the Santos and Campos basins to thermoelectric power plants.

Shell participated as an exclusive supplier for the 466MW Vale Azul II natural gas project that won a PPA at a power tender last year with start date seen in after 2021.

“This has given us knowledge of the power tendering process,” says Araújo.

Additionally the company’s power trading unit last year opened an office of Shell New Energies in São Paulo to prospect solar power opportunities in Latin America, and has partnered with the research financing foundation of São Paulo state government (Fapesp) to open a natural gas and renewables research centre.

“Brazil is special in that it has many energy options and we want to take part in this growth,” Araújo said.

He noted that Brazil is the only country where Shell has a fully blown biofuels company, Raizen, which produces and distributes sugar cane ethanol, a common fuel for Brazil’s flex fuel vehicles fleet that can run on ethanol or petrol or both at the same time.

Alongside these initiatives, another that stands out is a 10-man workforce within Shell’s local headquarters in Rio de Janeiro to study alternatives for energy transition in the country. The team was put together 15 months ago, said Araújo.

Brazil was chosen as one of 10 countries where shell will develop energy transition plans, he said.

“The team, which is made up of people not exclusively allocated to this, is looking at natural gas, power generation, wind and solar.”

Their aim is to look at the long term, 10 to 15 years ahead, and draw up scenarios. At the same time, business development teams will be looking at projects and opportunities, which could include greenfield or M&A in the renewables sector.

“What determines which investment will go ahead will be its economic feasibility,” he said.

Transition

Shell eyes Brazilian wind as part of global renewables drive