Royal Dutch Shell Group .com Rotating Header Image

‘Proof the energy world is transitioning’: Sonnen’s bold future under Shell

Angela Macdonald-Smith Angela Macdonald-Smith Energy reporter: Mar 20, 2019

The head of Europe’s biggest battery producer says the company’s takeover by oil giant Shell will give it the “bold” presence needed to thrive when the sector takes off in 18 to 24 months, when faster growth rates and tougher competition will prove a competitive test.

“We are in the very beginning of the storage market worldwide,” Sonnen chief executive Christoph Ostermann said during a visit to Australia this week. “We expect to reach an inflection point very, very soon and we have to prepare for that, secure financing for that and enhance our global footprint.”

Ms Ostermann said the storage market was “commoditising”, as demonstrated by Shell’s full takeover of the rest of Sonnen, announced last month.

“Why should large global players like Shell invest in this business otherwise?” he said.

“This is the practical example of the energy transition; it’s the proof point that the old energy world is transitioning to the new energy world.

“This is the moment where it really becomes the product which will scale up and which will be available to everybody with a totally different market size.”

Reputation secure

Mr Ostermann is not worried Shell’s ownership will harm Sonnen’s image as an independent, clean, green technology supplier, pointing to the global energy major’s many investments in complementary areas in recent years. Those include the acquisitions of one of Europe’s biggest electric vehicle-charging networks NewMotion in 2017 and of US-based EV charging software provider Greenlots in January, as well as UK-based mass-market energy and broadband provider First Utility in February last year.

“They have a very strong footprint; this can help us a lot, and also the backing can help us a lot in scaling up and further developing our products, enhancing our footprint, in particular, also in Australia and in general globally,” he said.

Similar links for Sonnen are likely to be explored in Australia but, in the short term, the takeover by Shell will probably bring little change in the company’s strategy, which is to pursue “very aggressive market penetration” this year and next, said Nathan Dunn, chief executive of the business in Asia-Pacific.

“If anything there will be finer details tweaked that enable us to accelerate that slightly, but the plan is to focus on three key markets in Australia that we believe are the growth drivers for energy storage: South Australia, NSW and Queensland,” he said.

Sonnen has sold more than 3000 battery systems in Australia, with installations running slightly lower, making it “a close No.3” in the domestic market, Mr Dunn said.

Slow uptake

But uptake in some regions had been slower than anticipated, with Mr Dunn signalling that pricing for Sonnen’s premium storage product, which includes smart energy-management software to optimise operations, may be deterring some consumers more familiar with competing brands, such as LG Chem and Tesla.

“We need to do a lot more education of end customers … around the benefits of energy generation and energy storage and the impact it has on their homes,” Mr Dunn said.

He added that the typical eight-to-10 year payback from a Sonnen battery was “a solid proposition” given a 10-year warranty and a life of up to 20 years. “There are a lot of people in the market that are talking price as opposed to talking value for the customer,” Mr Dunn said. “Price is one mechanism to secure a customer, but it doesn’t mean that the customer is going to get the best results from an energy storage perspective.”

For Shell, which first bought a stake in Sonnen in May last year, the full takeover launches it into the consumer energy market in Australia, where it wants to build a major electricity-generation retailing business within 10 years, the group’s head of integrated gas and new energies Maarten Wetselaar said on Monday.

The Sonnen acquisition “is an interesting example of where the future of Shell will be, and where we believe we can and must go,” Mr Wetselaar said.

*********************************************************

Angela Macdonald-Smith writes on energy specialising in gas, oil, electricity. Based in our Sydney newsroom, Angela is chief of staff for resources and energy. Connect with Angela on Twitter. Email Angela at [email protected]

SOURCE

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, shell2004.com, shellshareholders.org, don-marketing.com and cybergriping.com are all owned by John Donovan. There is also a Wikipedia article: royaldutchshellplc.com

Comments are closed.

%d bloggers like this: