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Wind turbines in the Italian countryside

Insight: From sunshine to software: Shell acquires virtual power plant in Italy

In October, Shell completed the acquisition of EGO S.r.l., an Italian energy management company which connects distributed electricity producers and consumers into a virtual power plant (VPP). Rupen Tanna, Shell Energy Europe’s head of power trading, explains more:

What is EGO?

Headquartered in Genoa, EGO's core business is to purchase and aggregate electricity from numerous distributed power plants, optimise its deployment and then trade it on the local energy market. It also participates in capacity markets – where providers are compensated for their ability to deliver a specific amount of generation – and it offers ancillary services, which ensure that a power system delivers sufficient enough output to meet demand while remaining stable.

It is active in the environmental certificates business – offtaking and trading guarantees of origin – a digital certificates confirming that a megawatt-hour of electricity has been produced from a renewable source – efficiency, or ‘white’, certificates, which certify that a certain reduction of energy consumption has been achieved, and EU allowances, carbon credits which are used in the EU’s Emissions Trading Scheme.

Its data business is focused on the energy efficiency market, offering energy-intensive industrial companies and distribution systems operators data-driven energy services to help boost their efficiency and sustainability.

How much energy does EGO manage and how?

EGO has 1.6 GW of renewable and co-generated power under management, aggregated from over 1,500 production plants.

And that is its specialism, managing energy produced from a wide range of distributed sources and boosting efficiency through its artificial intelligence-based digital monitoring, aggregation and dispatching platforms.

Who are its clients?

Its clients include independent energy producers, both from renewable (wind, solar, hydro, waste-to-energy) and flexible plants, including cogeneration plants – which produce both heat and electricity – and hydroelectricity plants with reservoirs. Its energy services business serves companies in a range of industries, including food and beverage, pharmaceuticals, plastics, paper and textiles.

What is the role of VPPs?

Power markets are becoming a lot more complex through widespread renewable and distributed power generation. VPP platforms, such as EGO’s, play a key role in enabling efficient management of these flexible small to midsize assets distributed throughout the grid to participate in the dispatching and ancillary services’ markets, which until recently were limited to large production plants.

Ultimately, VPPs optimise the delivery of the energy that society needs, both more efficiently and more sustainably.

Is Shell already present in the VPP market?

Yes. Shell acquired 鶹ý-based  in 2019 and Germany-based  in 2021. Limejump was fully integrated into Shell in 2022.

How does this fit in with Shell’s other activities in the Italian power market?

The acquisition of EGO complements Shell Energy Italy’s well-established position in Italy, helping us to build out a fully integrated power business. EGO is ideally positioned to complement Shell Energy’s integrated solutions, from renewable generation capability to trading and supply and industrial customers. With its ambitious decarbonisation goals, the Italian market offers strong growth prospects.

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