Shell Sheds Solar businesses in India and Sri Lanka
As the solar industry feels the heat of stock volatility, the oil giant lightens its renewable energy portfolio by selling its India and Sri Lanka solar businesses.
by: Rachel Barron, December 12, 2007
Source: GreenTechMedia.com
http://www.greentechmedia.com/articles/shell-sheds-solar-386.html
As Germany’s solar titan Conergy cuts its forecast for a second time and solar stocks feel the pain of volatile trading, Royal Dutch Shell sells off more of its silicon-based solar business. Last year, the European oil giant sold off the bulk of its solar business for an undisclosed amount to Germany’s SolarWorld. At the time, Shell held on to its “rural” solar business.
The U.K. Guardian reported Tuesday that the Anglo-Dutch oil group has pulled out of its rural business in India and Sri Lanka because it wasn’t making enough money (see this post on Earth2Tech). Despite the speed of the Internet, some news still travels slowly. India’s Economic Times reported that the Kolkata-based company, Environ Energy-Tech Service bought Shell’s India and Sri Lanka solar energy businesses for an undisclosed sum in early November.
The news doesn’t mean Shell has given up on solar completely. The company has decided to focus on next-generation technologies such as thin films, which use little or no silicon, instead of traditional crystalline cells. After years of going nowhere, the technology has picked up some traction in the marketplace during a worldwide shortage of solar-grade silicon (see Thin-Film Solar Production to Leap Forward).
The shortage has been putting the squeeze on traditional solar manufactures, and Wall Street has responded by dropping solar stocks on news of tighter margins and sending shares skyrocketing when a company secures a silicon contract (see Trina Solar Shares Fall 20% on 3Q and LDK Shares Jump 30% on Q-Cells Deal).
Late Tuesday, Conergy (XETRA: CGY.DE) showed that the solar business can be tough when it cut its forecast for the second time in a two-month span (see Conergy’s CEO Steps Down).
The German solar company now says it will post a loss, before interest and taxes, of €150 million ($220 million) to €200 million ($294 million) in 2007. Previously, the company expected a profit of € 40 million ($58.7 million). Conergy also said it might not reach its € 1 billion ($1.5 billion) sales target. Shares dropped 12.9 percent, or €3.36 ($4.93), to € 22.69 ($33.32) per share.
The unpredictable solar market could be helping to prompt Shell to stick to what it knows — fuels. The company said Tuesday it was forming a joint venture with biofuel-startup HR Biopetroleum to grow algae in sea water for the making of biofuels (see Salty Fuel).