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Shell to 'insource' electricity in the Netherlands via its own wind farm iStock

Oil and gas giant Royal Dutch Shell signed an agreement on Friday (16 December) to buy all of its electricity in the Netherlands from an offshore wind farm which it part owns.

The 108MW power generation site in the Dutch North Sea – Windpark Egmond aan Zee – opened in 2006, and is jointly owned and operated by Shell and Nuon Energy, part of Vattenfall group.

The site is considered to be the Netherlands' first large-scale offshore wind farm. Shell said the electricity generated would be for industrial and large scale commercial usage, and forms part of its drive to expand in the renewable energy sphere.

Jonathan McCloy, general manager for northwest Europe at Shell's energy trading arm, said the five-year energy supply agreement will come into effect on 1 January, 2017.

"This agreement allows us to develop our expertise in wind management as well as to establish Shell Energy Europe as an active participant in the renewable electricity market in Europe," McCloy added.

Atop its connotation for the increased adoption of renewable energy, the move is also indicative of "insourcing" within energy intensive industries. In a first move of its kind in civil aviation, Delta Airlines decided to insource jet fuel by acquiring Trainer Refinery in Philadelphia, USA in April 2012 from ConocoPhillips to offset exposure to fluctuations in fuel prices.