Shell is scaling back its presence in Europe’s renewable energy market after agreeing to sell its onshore renewables business to French rival TotalEnergies in the latest sign of a strategic shift among major oil and gas companies.
The FTSE 100 energy giant said the deal would transfer a portfolio of renewable assets across the UK, Italy, the Netherlands and Spain, including a pipeline of solar, wind and battery storage projects.
TotalEnergies will acquire a portfolio with around 4 gigawatts of capacity, including approximately 500 megawatts of operational and under-construction solar and wind assets.
The transaction, which remains subject to regulatory approval and is expected to complete by the end of the year, marks another step in chief executive Wael Sawan’s drive to reshape Shell’s investment priorities.
Since taking charge, Sawan has moved the company away from some of its more aggressive renewable energy expansion plans, arguing that capital should be focused on businesses where Shell believes it has stronger competitive advantages.
Machteld de Haan, Shell’s president for downstream, renewables and energy solutions, said the agreement reflected the company’s approach of “actively managing and high-grading” its power portfolio.
She said Shell was recycling capital and concentrating on areas including energy trading and customer-focused solutions where it could generate stronger returns.
For TotalEnergies, the acquisition strengthens its position in Europe’s increasingly competitive electricity market. Stephane Michel, president for gas, renewables and power, said the deal supported the company’s integrated strategy across power generation and energy supply.
The move highlights a wider reassessment among energy majors as they balance climate commitments with investor demands for profitability.
Shell’s retreat from parts of the renewable sector comes days after rival BP announced it was seeking buyers for its UK North Sea operations after six decades of production, reflecting a broader effort by traditional energy companies to reshape portfolios.
The shift underlines a growing divide in the energy industry: while governments continue to push for rapid decarbonisation, major producers are increasingly prioritising projects that deliver predictable returns and shareholder value.
For Europe’s green transition, the message is uncomfortable: the biggest energy companies are not abandoning renewables entirely — but they are becoming far more selective about where they place their bets.
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