Shell in race for $1.1 billion green energy projects in Spain, sources say

By Isla Binnie and Andres Gonzalez

MADRID (Reuters) – Oil group Shell and utilities Naturgy and Verbund are preparing binding bids to buy renewable energy assets in Spain valued at around 1 billion euros ($1.1 billion), Reuters said. Reuters three sources familiar with the matter.

Spanish fund manager Q-Energy is selling the portfolio, taking advantage of strong appetite from European energy companies who are feeling growing pressure from investors and governments to tackle climate change.

Competition for market share is heating up as oil and gas companies set ambitious green goals, jostling with utilities and existing renewable energy companies to lead the energy transition.

Binding offers are expected by the end of April, the sources said.

Shell, Naturgy and Q-Energy declined to comment. Verbund did not immediately respond to a request for comment.

Mainly made up of solar projects, the assets up for sale are scattered near Guadalajara in central Spain to the sunny southern coastal region of Andalusia, one of the sources said.

The successful bidder is also expected to hire a team of around 25 people to develop the assets, the sources said.

Shell has made a number of solar acquisitions and this year won licenses with Iberdrola’s Scottish Power to develop wind farms in the UK’s North Sea.

Naturgy changed its name from Gas Natural in 2018 and has since established a plan to focus on renewable energy and distribution networks. Verbund produced 90% of its electricity from renewable sources last year and said it was looking for opportunities to increase its investment in the sector.

The sold portfolio includes around 75 megawatts (MW) of solar capacity covered by a former subsidy scheme that guarantees base revenues of around 60 million euros per year, one of the sources said.

It also includes development projects that will have the capacity to generate around 3.6 gigawatts (GW) of electricity once construction is complete, the sources said. More than half of them already have network login permissions.

One gigawatt of power is roughly equivalent to the average output of a nuclear power plant.

($1 = 0.9202 euros)

(Reporting by Isla Binnie and Andres Gonzalez; Editing by David Goodman)

Edward K. Thompson