Shell UK lays out plans for switch to alternative fuels

Royal Dutch Shell has clear intentions to switch its energy model, reduce emissions and expand its fuelling business to cover all possible options. At the APEA Live 2017 Shell UK explored what the future of forecourts will be over the next two decades.

With Theresa May’s Government announcing its ambitions to stop the sale of new diesel and petrol cars by 2040, the UK’s downstream petroleum market faces a big, long-term challenge. Royal Dutch Shell is currently ahead of its major competitors in terms of looking at fuelling alternatives that will ensure its survival in the fuels industry.

During last week’s APEA Live 2017, the one-day event for the British petroleum industry that took place in Milton Keynes, Jane Lindsay-Green, Retail Future Fuels Manager at Shell UK, gave an insight into Shell’s plans for the next 23 years.

By 2025 around 50% of the total income for Shell UK will be from non-fuel sales, following a clear trend towards convenience and other services that present higher margins. In terms of fuel, by that same year low emission energy solutions should make up for 20% of the fuelling business, according to Lindsay-Green.

The company believes there won’t be one dominant form of fuel in the future but instead it will be a “mosaic” of options that will go from petrol and diesel to electric and natural gas. However, it seems like Shell is placing its biggest bet on electric vehicles for the time being. “We need to be ready for the EV change,” said the Shell manager.

Paving the way for electric mobility

Ten new Shell sites in the UK have been equipped with rapid-charging stations that have a 50-kilowatt capacity of power. With electric cars expected to take around 40 minutes to charge-up, Shell will offer a variety of options to drivers in order to keep them entertained such as Wi-Fi, food and drinks.

In terms of electric mobility, Shell has already revealed its ambitions with the acquisition of NewMotion, a Dutch company that manages over 30,000 charging points for electric vehicles in Western Europe, and more recently by joining the IONITY electric vehicle superfast-charging network in Europe, together with some the world’s largest auto manufacturers.

With most of the audience at the APEA Live being involved in traditional fuelling options, Lindsay-Green was quick to point out that the electric vehicle revolution was still very far away. Despite all the noise surrounding the issue, electric cars currently represent a tiny 1.8% of the total new car market in the UK, according to Next Greencar.

More than just electric vehicles

Hydrogen cell vehicles is another area where Shell is ready to invest. In 2017 it became the first branded fuel retailer to sell hydrogen at one of its retail sites in the UK – a station in Cobham, on the outskirts of London. Next week it plans to open its second hydrogen fuelling station and another before the end of year. Hydrogen-powered cars take up to five minutes to refuel and can potentially drive up to 700 kilometres without refuelling.

Although promising, Lindsay-Green believes hydrogen still needs time to become a mainstream fuelling option. “Hydrogen will play an important role in the mid to long-term,” she said.

Natural gas and liquefied petroleum gas (LPG) are the remaining options currently being assessed by Shell. While the fuel retailing company is market leader in the UK for LPG – a solution widely used by British drivers – it is only starting to offer LNG at forecourts. In fact, they will open their first LNG station in the UK next year with a clear focus on long-distance heavy-duty vehicles.

“There is not one solution to the air quality problem. We will be seeing a mosaic of options in the future,” added Lindsay-Green.

Article by Oscar Smith Diamante