BBC News Online: Business

Shell explores alternative energy

Environmentalists have welcomed plans by the Shell oil company to invest vast sums in wind and solar energy over the next five years.

It will put up to US$1bn into research and development - although that will still be far less than it spends on its oil and gas business.

Shell is not going to stop being an oil giant in the foreseeable future, but its plans to invest in renewable energy show how many big oil producers see their future as all-purpose energy companies.

Shell sees the future of wind energy as lying in big, offshore wind farms - both because the wind is stronger at sea, and because there are no people there to protest at the intrusion into their environment.

It sees north-west Europe as an ideal region for this technology.

In poorer countries nearer the equator, small, local solar power plants may be more viable, both because the sun is stronger - and because Shell says two billion people currently have no access to electricity supply grids.

Environmentalists say there is evidence that European-based oil firms like Shell are taking notice not only of the future economics of energy production, but also of public opinion about global warming and environmental protection.

But they say US-based firms are still operating in a less environmentally aware political culture.

Shell is also doing more basic research on two other sources of power: geothermal energy - using the heat under the Earth's surface - and biomass, growing plants for fuel.