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Shell to Build Its First Utility-Scale Solar Farm Down Under

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Royal Dutch Shell PLC  recently announced that it will construct its first utility-scale solar farm in Australia. The project will be built at Gangarri plant in Wandoan, Queensland State and is estimated to generate 120-megawatt (MW) energy using 400,000 photovolatic (PV) panels.

Operations at the QGC onshore natural gas project to be run by the solar farm are expected to remove carbon footprint by approximately 300,000 tonnes million annually in the state. The farm is expected to get completed in early 2021.

Solar Project Developments in Australia

Shell Australia is committed to provide cleaner environment to its customers in the state on a consistent basis. During the construction phase of this new project, the company anticipates generating 200 new jobs and intends to source supplies and services from local businesses.

Queensland’s geographical advantage makes it an appropriate region to exploit solar energy as the state is situated in a sunny zone. The project is also located next to the current power infrastructure and within the bounds of Shell’s QGC onshore natural gas project that sprawls across Queensland’s Western Downs area. Such a convenient location enhances the project's property and operational value.

Energy Portfolio Enhancement

With rising environment awareness, the adoption of renewable energy increased worldwide. Moreover, solar energy will be a vital resource when renewables become the primary source of power generation. Shell Australia is making concerted efforts to expand its renewable asset base. 

Apart from these developments, the company bought ERM Power Ltd last year for A$617 million ($419 million), thus marking its entry into Australia’s highly competitive energy market. ERM is Australia's second largest energy retailer to businesses and the relevant industries.

By 2030, this one of the world’s largest oil and gas players aims at becoming the biggest power producer globally, solar being one of the building blocks of its power strategy. With the ERM contract, Shell strengthened its position in the electricity sector, taking a step forward to cleaner energy. By 2025, it strategizes to escalate its annual spending on power business between $2 billion and $3 billion.

Zacks Rank & Key Picks

Shell carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Marathon Oil Corporation (MRO - Free Report) , Chevron Corporation (CVX - Free Report) and TC Energy Corporation (TRP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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