Impairment charges of nearly $1bn mainly relating to assets in North America have led to deepening losses in Shell’s renewables business in the fourth quarter of 2024.
The renewables and energy solutions unit recorded a loss of $1.2bn in Q4 2024, compared to a loss of $272m in Q4 2023.
This result was due largely to impairment charges of $996m mainly relating to renewable generation assets in North America partly offset by favourable movements of $50 million relating to an accounting mismatch due to fair value accounting of commodity derivatives.
Shell Chief Financial Officer Sinead Gorman told reporters that the company was writing off its investment in the Atlantic Shores offshore wind project off the coast of New Jersey, a joint venture with EDF.
The project doesn’t fit “our capabilities nor the returns that we would like”, Gorman told reporters in remarks reported by Bloomberg.
The project received federal approval from the Bureau of Ocean Energy Management in October, and could generate up to 2.8GW.
The segment losses, compared with the third quarter 2024, also reflected unfavourable one-off tax movements ($107m) and higher operating expenses, which saw an increase of $71m.
Most activities within the renewables and energy solutions business were loss-making in the fourth quarter 2024.
Segment earnings, compared with the full year 2023, reflected lower margins (decrease of $1.7bn) mainly from trading and optimisation primarily in Europe due to lower volatility, partly offset by lower operating expenses (decrease of $632m).
Full year 2024 segment earnings also included net impairment charges and reversals of $1bn million mainly relating to renewable generation assets in North America, partly offset by favourable movements of $300m relating to an accounting mismatch due to fair value accounting of commodity derivatives and a net gain on sale of assets of $94m.