By Isla Binnie & Andres Gonzaga

MADRID, Reuters – Three sources close to the matter said that Shell and Verbund, oil majors and utilities in Spain are preparing binding offers to purchase renewable energy assets worth approximately 1 billion euros ($1.1 million) each.

Q-Energy Spanish Fund Manager is Selling the Portfolio. This was done to capitalize on strong European demand for energy from companies and governments that are feeling more pressured by investors and governments to combat climate change.

As oil and gas companies compete for market share, they are jostling with existing renewables businesses and utilities to be the leader in energy transition.

The sources stated that binding bids should be received by April end.

Shell, Q-Energy and Naturgy have declined to comment. Verbund didn’t immediately reply to my request for comment.

One source said that the majority of assets are solar-related and can be sold from Guadalajara (central Spain) to Andalucia.

Sources said that the winning bidder will likely hire a team consisting of approximately 25 people in order to build the assets.

Shell acquired a lot of solar assets and won this year licences with Iberdrola’s Scottish Power for the development of wind farms in British North Sea.

Naturgy, which was formerly known as Gas Natural, has changed its name to Naturgy in 2018. Since then it has developed a strategy for focusing on distribution grids and renewable energy. Verbund had a record year of producing 90% of its electricity using renewable energy sources. It has stated that it will continue to look for ways to invest in the sector.

One source said that the portfolio under sale includes approximately 75 megawatts of solar power. It is covered by an older subsidy system, which guarantees core earnings of around 60 million euros per year.

The sources also said that it includes developments projects with the potential to generate approximately 3.6 gigawatts, (GW), of electricity upon completion. This includes more than half that already have grid connection permits.

A gigawatt is approximately equivalent to the average nuclear power plant production.

($1 = 0.9202 euros)