Oil and gas major Shell has triggered a major shake-up of the east coast electricity supply market, striking a $617 million deal to acquire business retailer ERM Power as it prepares for the radical disruption it expects throughout the sector because of the wide-scale shift to renewables.

The agreement, struck at a 43 per cent premium to ERM's closing share price on Wednesday, sees Shell act on well-flagged ambitions to establish a major integrated power business in Australia that sits alongside its oil, gas and chemicals business.