Shell retreats from North Sea wind projects under pressure on net zero agenda

Shell has dealt a setback to the UK Government’s net zero strategy by announcing its withdrawal from two significant offshore wind farm developments in the North Sea. The company has abandoned its involvement in the MarramWind and CampionWind projects, both situated off the east coast of Scotland, following a restructuring of its partnership with ScottishPower Renewables.

The revised agreement sees Shell trading its 50 percent stake in the MarramWind project for complete ownership of the smaller CampionWind venture, only to subsequently return the CampionWind lease to Scotland’s Crown Estate. This series of moves marks Shell’s exit from both projects. ScottishPower will now assume sole control of MarramWind, while the fate of CampionWind remains unclear in the absence of an operator.

Shell attributed the decision to a comprehensive review of its power business and a strategic shift under chief executive Wael Sawan towards focusing on trading and retail, rather than renewable generation. Shell’s retreat means the firm has no ongoing UK offshore wind projects, as both ventures were not expected to be operational until the next decade.

The UK currently possesses 14.8 gigawatts of offshore wind generating capacity. The Government aspires to triple this figure to between 43 and 50 gigawatts by 2030, forming the backbone of its pledge to secure a predominantly clean electricity grid within that timeframe. However, escalating costs for offshore wind developers have led to concern over the pace and viability of project delivery.

The Government has committed up to £1.1 billion in subsidies for wind farms scheduled to become operational between 2028 and 2031, but industry representatives argue this funding is insufficient to meet Labour’s ambitious clean energy targets. The Department for Energy Security and Net Zero reaffirmed its support for offshore wind, emphasising the necessity of the sector for energy security and price stability, but highlighted that Shell’s move was a commercial decision.

This development invites further scrutiny of Ed Miliband’s net zero agenda, especially as Shell faces pressure from investors to prioritise oil and gas activity over renewables. Critics argue that costs relating to green policies are compounding pressures on household energy bills.