Shell expands role in VPP market with acquisition of German operator Next Kraftwerke

Image: Shell/James Goldman.

Shell Overseas Investments BV has acquired German virtual power plant (VPP) operator Next Kraftwerke, expanding its footprint in the space.

The energy giant previously owned 34% of the company, and is expecting the acquisition of the rest from a consortium of shareholders to complete during the second quarter of 2021, subject to regulatory approval.

It will allow Shell to grow by adding smaller renewable assets to our portfolio, said David Wells, VP Shell Energy Europe.

“The complementary skills of the two companies will also support utility-scale large renewable projects by providing a wide range of hedging and risk management options.”

Next Kraftwerke currently operates over 10,000 decentralised energy units across Germany, Belgium, Austria, France, Poland, the Netherlands, Switzerland and Italy.

Additionally, it announced a joint venture with Japanese electronics giant Toshiba in November 2020, to study the possibility of VPP solutions based in Japan.

Hendrik Sämisch, founder and CEO of Next Kraftwerke added that bringing the two companies together will help accelerate the transition to a decarbonised energy system, “through the wider deal opportunities and trading synergies that will come from the expected rapid increase in demand for renewable energy trading contracts.”

The acquisition follows Shell buying UK based VPP operator Limejump in February 2019, which now operates as a wholly owned subsidiary. In January, the company celebrated the addition of 170MW of assets to its portfolio, as the demand for flexibility continues to grow apace.

Speaking to Energy Storage News today, Catherine Newman, CEO of Limejump said it was exciting to have one of Europe’s largest VPPs – with a capacity of 8450MW – as part of Shell.

"We work in very different areas of the market, so there's no concerns in terms of treading on each other's toes. I'm really looking forward to working with them more closely, and looking at the synergies we can find - a great addition to Shell's stable.”

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