Oil giant Shell makes grand entrance into electrical vehicles market

24 October 2017 Consultancy.uk

Shell has taken a large step into the world of electric vehicles, with the purchase of NewMotion. The charge-point provider, who were advised by three M&A and law firms, currently provides more than 50,000 public charge points for drivers across 25 European countries.

Shell has signed an agreement to buy NewMotion, one of Europe’s largest electric vehicle charging providers, as the international fuel titan prepares for an increasingly electrified market. The deal will also enable both companies to accelerate the transition to a low-carbon transport model. Shell is one of the world’s largest energy providers, and the UK’s most valuable brand.

While Shell remains in a healthy financial state, however, the global oil industry has been stung by falling commodity prices. Oil is presently expected to remain as the highest demand fuel until at least 2035, however, improving fuel efficiency technologies, coupled with the rise of renewable energy, have still seen demand hit as a result. Meanwhile, in the UK, the planned ban for the sale of combustion engine powered vehicles by 2040 is set to further impact on oil prices – with diesel sales taking a 20% nosedive in the month of July, when the government’s proposals were announced.

Oil giant Shell makes grand entrance into electrical vehicles market

With electric vehicles (EVs) and hybrids set to take the place of the formerly petrol/diesel fuelled automotive industry, diversification into the broader energy industry has become essential for long-term market incumbents looking to avoid being bypassed by disruption. With the cementing of the NewMotion deal, the oil magnates have moved toward achieving that. Under the terms of the deal, NewMotion will remain focused on accelerating its mission in Europe to deliver more innovative smart-charging solutions to homes, businesses and public parking spaces. Upgrading infrastructure is a key concern for governments looking to push their populations to adopt EVs, and beyond the home, the Highways Agency has had to commit to a £15 million infrastructure programme designed to ensure that drivers are never more than 20 miles from a charging point on the UK’s A roads. The acquisition will give NewMotion a vital shot in the arm, enabling them to tap into this demand with the enhancement of its EV charging services, turning more parking spaces into charging stations as well as improving users’ charging experience across Europe.

Based in Amsterdam, NewMotion was launched in 2009 by a group of entrepreneurs who made it their mission to contribute to a cleaner world. Today, NewMotion operates more than 30,000 electric charge posts in the Netherlands, Germany, France and the UK. It also provides access to a network of more than 50,000 public charge points across 25 European countries, serving more than 100,000 registered charge cards.

Sytse Zuidema, CEO of NewMotion, extolled the virtues of Shell, as he stated, “We are very pleased to have such a strong investor that fully supports our mission, enabling us to further expand across Europe at a time when the transition to electric vehicles is gathering pace. We are excited that our ongoing mission and belief in a transition towards less-polluting transport source has been endorsed so strongly by Shell, one of the world’s leading energy companies.”

Quote Sytse Zuidema

Shell’s Vice President for New Fuels, Matthew Tipper, added, “Today’s announcement is an early step towards ensuring customers can access a range of refuelling choices over the coming decades, as new technologies evolve to co-exist with traditional transport fuels. This move provides customers the flexibility to charge their electric vehicles at home, work and on the go. When you add this customer offer to our current roll out of fast charging points on Shell forecourts, we believe we are developing the full raft of charge solutions required to support the future of EVs.”

Dealmakers

Dealmakers involved in the deal on the buyer’s side were Shell’s own in-house legal, commercial due diligence and transaction support departments, while NewMotion was advised by three M&A parties in their Amsterdam HQ. Two Dutch law firms assessed the agreement on the seller’s end, with Vriman M&A Lawyers examining the target’s legal standing in the purchase, and Amstone Tax Lawyers examining their fiscal footing, while the Dutch arm of consulting firm Drake Star Partners (which operates locally as Improved Corporate Finance) acted as the exclusive financial advisor to NewMotion’s shareholders throughout the transaction. The Drake Star Partners team was made up of Frank Verbeek, Sherief Rahim and Bas Hendriks.

Commenting on the acquisition, Frank Verbeek, Managing Partner of Drake Star Partners Netherlands, said, “As part of the Shell New Energies portfolio, NewMotion has a unique opportunity to expand its services to the level of ambition the founders, shareholders, management and staff worked so hard for. We are proud to have played our role in ensuring NewMotion can execute their international strategy… We believe that within the mobility segment, EVs will prove to be an extremely dynamic sector with many more companies looking for opportunities.”

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WEF finds no progress made on greening economy

01 April 2019 Consultancy.uk

The reports of two influential bodies, in the space of a day, have warned that no progress is being made to prevent major climate change. The World Economic Forum has warned that greening of the global energy transition has stagnated over last five years, while the International Energy Agency has confirmed coal use rose again last year.

The position of the Academies of Science from 80 countries, plus a majority of scientific organisations that study climate science, is that humans are causing rapid climate change – often referred to as global warming. Roughly 95% of active climate researchers publishing climate papers endorse the consensus position that since the industrial revolution, the boom in carbon emissions from fossil fuel powered human activity has heavily impacted the planet, with rising levels of CO2 and other greenhouse gases trapping heat from the sun causing global temperatures to rise – something which will have catastrophic results in the near future.

Despite the steadfast consensus among the scientific community on the matter, however, there has been little to no meaningful action to avert disaster. In fact, while the signing of the Paris Accord was met with great excitement, since it came into force, global carbon dioxide emissions have continued to rise. Today, they sit at their highest levels yet, after a strong economy and extreme weather stoked a surge in energy demand last year.WEF finds no progress made on greening economyAccording to the world’s energy watchdog, the Paris-based International Energy Agency (IEA), energy spiked by 2.3% in 2018 – the biggest leap since 2010 – with that demand largely being met with fossil fuels. As a result, global emissions of carbon dioxide hit the record high of 33 billion tonnes in 2018, a rise of 1.7% on 2017’s figures. Commenting on the findings, IEA chief Fatih Birol said the rise in energy demand was “exceptional” and a “surprise for many.”

Birol added, “We have seen an extraordinary increase in global energy demand in 2018, growing at its fastest pace this decade. Looking at the global economy in 2019, it will be rather a surprise to see the same level of growth as 2018.”

The suggestion from Birol that 2018 is likely to be an anomaly which will not be seen again is strange, considering the added strain which the boom in emissions will place on the environment. To suggest that heightened energy demand was driven by extreme weather – which is increasingly difficult to claim is unrelated to man-made climate change – and then to suggest that such a thing is unlikely to occur any time soon in spite of emissions having increased seems contradictory.

Regardless of this, the bad news was further compounded within hours of the IEA’s release. A report from the World Economic Forum released on the same day concluded that the world's energy systems have not become any greener in the last five years. Despite the agreement of global climate targets, falling green power costs, and mounting public and business concern over the catastrophic impacts runaway climate change could wreak, the WEF’s damning assessment warned that little to no progress has been made on making energy systems more environmentally sustainable since 2014.

Coal is the largest hindrance of change on this front, according to the report. Recent years have seen improvements in energy access and security, but far too many nations remain dependent on coal power for the new energy systems to have made any environmental gains. At the same time, major economies have failed to decrease or even slow the amount of energy they use per unit of GDP, leaving smaller actors who have made changes micturating into a gale. Change on the part of the world’s largest economies is therefore crucial to driving the development of a greener, more efficient global economy, the WEF concluded.

Commenting on the findings, Roberto Bocca, leader of the WEF's future of energy and materials division, said urgent action is now needed to move toward decarbonisation. He added, "We need a future where energy is affordable, sustainable and accessible to all. Solid progress in bringing energy within the reach of more and more people is not enough to mask wider failures, which are already having an impact on our climate and on our societies."

The news comes even as sustainability continues to be talked about as a ‘top agenda item’ at the majority of the world’s largest corporations. While 85% say that it will be more important still in another five years, it is clear that the majority of the world’s most powerful businesses are failing to walk the talk on the matter, regardless of what governments do.