Shell Australia's new head Tony Nunan says the energy major is screening further renewable energy opportunities after committing to build its first large-scale solar project in Australia.
The 120 megawatt Gangarri project, which has been in the works for several years, will be built near Wandoan in central Queensland and should be complete by early 2021.
It is further evidence of Shell's pursuit of its "new energies" strategy within Australia, involving combining renewable energy with natural gas to offer cleaner energy supply, based on an assumption of increasing electricity use within the supply mix.
"We are putting in place the building blocks against that strategy to deliver for our customers," Mr Nunan said, pointing to recent moves including Shell's surprise $617 million takeover last year of electricity retailer ERM Power, its purchase of a 49 per cent stake in solar farm developer ESCO Pacific, and its acquisition of battery supplier Sonnen.
"We will always keep scanning for opportunities; Australia is one of the target markets for us."
Involving about 400,000 photovoltaic panels, the Gangarri solar farm will supply electricity to its gas and power trading business Shell Energy Australia, which will use it along with power from the grid to supply the QGC coal seam gas business in Queensland. The deal will reduce QGC's carbon emissions by about 300,000 tonnes a year.
It is the first major move for Shell Australia under Mr Nunan, who took over as chairman on January 1 after the promotion of predecessor Zoe Yujnovich to company headquarters in The Hague.
“We believe solar will play an increasing role in the global energy system, especially when partnered with a reliable energy source such as gas,” Mr Nunan said, describing Queensland as "a key centre of activity for Shell's global ambitions to expand our integrated power business".
Shell wouldn't reveal the investment cost of the project, which will be funded from the $US1 billion-$US2 billion ($1.5 billion-$3 billion) Shell has earmarked globally for annual investment in its New Energies business.
Queensland Energy Minister Anthony Lynham said the project would help the state keep on track to achieve its target of 50 per cent renewable energy by 2030. It follows the announcement last week by AGL Energy and Vena Energy of a project to install the state's biggest battery near Wandoan.
Dr Lynham said Queensland was "providing the world a practical template on how to transition to [a] low-emissions future".
“AGL and Vena’s battery will be a stone’s throw away from the Gangarri solar farm,” he said.
“Around $5 billion has been invested in renewable energy projects in Queensland since December 2016, creating 4700 jobs. Queensland now has almost 5500 megawatts of renewable generation capacity."
Shell Energy Australia vice-president Greg Joiner said the group was increasingly incorporating renewable energy into energy offers for customers "by combining renewable energy with a firmed energy solution offering reliable supply, a fixed price and a cleaner, lower-emission package".
The project, named after the word for "sunlight" in the language of the Iman traditional owners of the site, is set to create up to 200 jobs during construction.
Shell is one of several international oil and gas majors manoeuvring into what are becoming dominant positions in Australia's renewable energy and storage sector, according to consultancy Rystad Energy.
French oil major Total, UK-based BP and Italy's ENI also have renewable energy projects in operation or development here as they diversify into cleaner energy sources.
Shell's commitment to build the solar farm comes amid a dive in commitments to build new wind and solar projects in Australia, which the Clean Energy Council has put down to regulatory risks, under-investment in transmission, and policy uncertainty.
