Royal Dutch Shell provoked a furious backlash from campaigners yesterday when it announced plans to scale back its renewable energy business and focus purely on oil, gas and biofuels.

Jeroen van der Veer, the chief executive, said that Shell, the world's second-largest non-state-controlled oil company, was planning to drop all new investment in wind, solar and hydrogen energy.

“I don't expect them to grow much at Shell from here, due to portfolio fit and the returns outlook compared to other opportunities,” he said, speaking at the Anglo-Dutch group's annual strategy briefing.

He said that instead Shell would focus its remaining renewable energy investments on biofuels, where it is conducting research into “second generation” fuels, so far with little commercial success.

Linda Cook, who heads Shell's gas and power business, said that wind and solar power “struggle to compete with the other investment opportunities we have in our portfolio”.

The announcement, which comes as Shell is fighting to maintain its commitments on dividends (which it will increase by 5 per cent this year) and its core oil and gas business in the face of a more than $100 slide in the price of crude since last summer, triggered a furious response from green groups.

John Sauven, the executive director of Greenpeace UK, said that Shell had “rejoined the ranks of the dirtiest, most regressive corporations in the world ... After years of proclaiming their commitment to clean power, they're now pulling out of the technologies we need to see scaled up if we're to slash emissions.”

A spokesman for the Department for Energy and Climate Change said: “We believe renewables have a strong future as part of the UK and global energy mix in the fight against climate change.”

Shell has invested $1.7billion on alternative energy in the past five years, compared with total capital expenditure of $32billion this year. It holds stakes in 11 wind power projects, mostly in the United States, with the capacity to generate 1,100 megawatts of electricity. It also operates research programmes into thin-film solar and hydrogen technology.

Shell also said that it will maintain its spending on carbon capture and storage projects in Germany, Netherlands, Norway, Canada, Australia and America - most of which also receive state support.

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