Oh, the irony: Fossil fuel financier signs major solar contract with fossil fuel producer

US financial giant Wells Fargo, and one of the world’s biggest fossil fuel lenders, and Shell Energy, a unit of British oil & gas major Royal Dutch Shell, have announced a 150MW solar Power Purchase Agreement, which will meet around 8 per cent  of Wells Fargo’s global energy needs.

According to The Washington Post, writing on Tuesday, Wells Fargo has signed a varying Power Purchase Agreement (PPA) with Shell Energy for 150MW of solar power in the United States, which will be purchased from three locations in Virginia and one in California.

While the deal is relatively small at only 150MW – and with uninspiring term lengths of seven years for solar energy purchased from California and just under seven years for solar purchased in Virginia – the deal is nevertheless highly symbolic, coming as it does from the second-biggest lender to fossil fuel companies over the past four years, and one of the world’s oldest oil and gas majors.

Moreover, the solar PPA comes amidst a global and economic-crushing pandemic, which only goes to highlight the appeal for solar projects and other renewable energy projects.

Shell Energy will serve as the middleman in this deal, having already entered into a long-term contract to buy power from the solar plants’ developers, part of 1.6GW worth of solar generation the company is involved with, through either its own facilities or joint venture partnerships in North America.

Further, according to a Shell spokesperson speaking to The Washington Post, Shell has over 10GW of managed-generation capacity from plants across North America, one-third of which comes from renewable energy.

For Wells Fargo, this move is a baby step, but as with most baby steps it is nevertheless important and instructive. In late 2019, figures reported by The Guardian showed that Wells Fargo was one of the world’s leading fossil fuel financiers, having provided $US42.8 billion to fossil fuel companies between 2016 and the first 6 months of 2019.

Earlier this year, a report compiled by a collaboration of environmental groups revealed that Wells Fargo was the world’s second biggest financier of fossil fuels in the four years since the Paris Agreement was signed.

The report showed that Wells Fargo, along with other US banks including JP Morgan Chase, Citi, and Bank of America, accounted for nearly a third of the world’s financing of fossil fuel projects, which totalled $US2.7 trillion since Paris.

Specifically, Wells Fargo had financed close to $US200 billion in support for the fossil fuel industry.

“From the Amazon to the Arctic — JPMorgan Chase, Citi, Bank of America and Wells Fargo’s social licenses to operate are tainted with the debris of climate chaos and Indigenous rights violations,” said Dallas Goldtooth, Keep It In the Ground Campaign Organizer of Indigenous Environmental Network.

“These banks must be held accountable for the destruction of Mother Earth and Indigenous lifeways. The time has long passed for banks to take corrective action –– they must divest from fossil fuels now.”

Wells Fargo itself points to a slight shift in its priorities. E.J. Bernacki, the bank’s spokesman for sustainability and corporate responsibility, told The Washington Post that “as the [energy] sector has evolved, so has our business.”

He said that “while Wells Fargo continues to work with our conventional energy and utility customers,” it was also “one of the largest lenders and investors in renewable energy and clean technologies.”

Specifically, by the end of 2019, Wells Fargo’s equity investments represented 10.3% of all solar and wind generation capacity in the United States.

Many more of these baby steps are needed to achieve anything of real note, but as it stands, this highly symbolic solar agreement between Wells Fargo and Shell Energy is proof of the indefatigability of renewable energy.