Shell has sought to calm fears expressed by some Powershop customers that the oil and gas giant’s acquisition of the electricity retailer would undermine its status as a ‘green’ energy company, saying that it has no intention of changing Powershop’s vision.
Earlier in the week, Shell announced that it would acquire Powershop from its current owners, Meridian Energy, as part of its push to become a dominant player in the Australian electricity market.
This announcement had prompted some strong reactions from existing Powershop customers, who had been attracted to the retailer due to its promotion of renewable energy and image as a ‘greener’ alternative to the bigger retailers.
Advocacy group GetUp said they had put Powershop “on notice”, following the announcement, saying that it would be shopping around while Shell still planned to expand its fossil fuel investments.
“Under Shell’s ownership, Powershop has become the very corporation many customers were actively trying to move away from,” GetUp’s climate justice campaign director Kathryn McCallum said.
“Supporting a big climate polluter is not what our members signed up for. We’re putting Powershop on notice that we are no longer satisfied customers and we will be shopping around.”
Following Shell’s announcement, Environment Victoria said that it had terminated its partnership with Powershop. The environment group had run initiatives to encourage supporters to switch their power supplies away from some of the ‘Big Three’ electricity retailers to Powershop.
“Powershop’s growth successfully challenged the business model of Australia’s biggest polluters, and over six years we helped switch hundreds of our supporters to what was then a more ethical energy provider,” it said in a statement.
‘The contributions from Powershop also supported our ongoing campaign to phase out coal power in Victoria. But the sudden and extremely disappointing announcement that Royal Dutch Shell will be the new owners of Powershop changes everything. They will now be owned by one of the world’s biggest climate wreckers.”
RenewEconomy has been contacted by several Powershop customers who have indicated that they had either switched to another electricity retailer or were actively searching for an alternative.
Several electricity retailers that have likewise pitched themselves as focused on renewable energy – including Diamond Energy, Enova Energy, Amber Electric and Energy Locals – worked to promote themselves to disappointed Powershop customers on social media.
Interesting day for many Powershop customers. Energy Locals is proudly majority owned by Quinbrook, which invests super fund money solely in renewable energy investments in both Australia and beyond ⚡️💚
— Energy Locals (@energylocals) November 22, 2021
Cooperative Power, a union backed electricity retailer that works in partnership with Energy Locals, said that it had received a surge of interest following the announcement, saying that it had signed up 230 new customers this week, after signing up six new customers the week before.
We are up to 230 switchers for the week, and counting. ⚡️⚡️⚡️
— CoPower (@Co_Power_) November 23, 2021
CEO of Enova Community Energy, Felicity Stening, told RenewEconomy that they had seen their sign ups increase 400 per cent in the wake of the Shell announcement.
“Enova has seen significantly increased interest across all of our channels, including online, email, social media and our call centre,” Stening said.
“We strongly welcome the new enquiries, and we always encourage people to look to ethical providers across all of their services, including energy, banking and superannuation,” Stening said.
Enova is a community owned electricity retailer, with around 1,600 members.
Stening said that Enova sources its electricity through a mix of purchases from customers selling surplus power from rooftop solar back to the retailer, and renewable energy purchases from Diamond Energy, which operates solar, wind and bioenergy projects.
Many Powershop customers expressed disappointment on discovering that the company, which had sought to position itself as an alternative to incumbent energy players with significant fossil fuel investments, had been acquired by one of the world’s largest oil and gas businesses.
Under Meridian, Powershop has sought to market itself as a renewable energy focused electricity retailer, allowing customers to opt-in to supplies of GreenPower, power from community energy projects or power combined with emissions offsets.
Shell said that it had acquired Powershop as part of its “Powering Progress strategy” with the oil and gas company committing to grow its investments in the electricity sector as part of a planned pivot to cleaner energy sources – setting a target to invest US$2 to $3 billion in renewable energy and “energy solutions” enterprises each year.
This has included the growth of Shell’s electricity businesses in Australia. Shell has previously acquired electricity retailer for commercial and industrial customers, ERM Power, and also purchased battery manufacturer sonnen, which operates a factory in South Australia.
A spokesperson for Shell told RenewEconomy that it would remain ‘business as usual’ for Powershop, stressing that there were no plans to make any fundamental changes to how the company operates and hopes to see the business grow.
“Shell’s target is to become a net-zero emissions energy business by 2050, in step with society’s progress in achieving the goal of the UN Paris Agreement on climate change,” the Shell spokesperson told RenewEconomy.
“Becoming a net-zero emissions energy business means that we are reducing emissions from our operations, and from the fuels and other energy products we sell to our customers. It also means capturing and storing any remaining emissions using technology or balancing them with offsets.”
“As part of our ambition to reduce emissions from the products we sell our customers, we intend to become a leading provider of clean Power-as-a-Service and this acquisition supports that intention, by broadening our customer portfolio to include Australian households.”
“We look forward to working with Powershop customers to support their energy decarbonisation ambitions,” the Shell spokesperson added.
A spokesperson for Meridian Energy echoed Shell’s comments, telling RenewEconomy that it saw the sale as a positive step in the company’s vision for Powershop.
“Meridian’s commitment to do good by our customers and the planet is stronger than ever,” the Meridian spokesperson said.
“We consider this sale as a positive for both, knowing customers will get the same great service and knowing Shell Energy and its partner ICG’s vision is to significantly invest in a transition to a cleaner energy future. We are proud of that.”
Meridian’s Australian renewable portfolio will be sold as part of the deal purchased by the Infrastructure Capital Group. This deal will cover the sale of the Mt Mercer and Mt Millar wind farms and three hydropower stations to Infrastructure Capital Group.
Power purchase agreements will be signed between ICG and Powershop, which will see these projects continue to sell power to the retailer after Shell’s acquisition.
The combined value of Meridian’s sale of its Australian business is A$729 million and is expected to be completed in early 2022.
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