Total’s plan to invest $2.5 billion for a 20 percent stake in Indian solar energy firm, Adani Green Energy Ltd (AGEL), has given the French oil major an early lead among peers, following their stated plans to commit more money to clean energy projects.
According to a compilation of recent renewable energy deals by Bloomberg, Total is leading British Petroleum, and Shell in new capacity acquisitions, even though it was the last of the three to announce net-zero targets last year.
Renewable energy investments by oil majors is pragmatic because the Sustainable Development Scenario (SDS) of the International Energy Agency (IEA) forecasts that renewable energies will represent around 30 percent of the world’s energy mix in 2040.
Alongside natural gas, the least carbon-intensive fossil fuel, renewables will enable both the meeting of the world’s growing demand for electricity and the limiting of global warming.
The Bloomberg data also revealed that Total has invested in 8.8 gigawatts (GW) of renewable electricity capacity, either operational or in construction or development phases.
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“Total has been a relatively early mover among oil majors in preparing for the energy transition,” Bloomberg Intelligence analyst Will Hares said in the report. “It holds the most renewable-power capacity installed or in development of any oil major, and the most ambitious capacity-growth targets.”
Total’s solar power highlights
The Bloomberg Intelligence ranking showed that the French company with a rating of 9.33 out of 10, compared with 8.4 for BP and 6.6 for Shell, has the highest overall carbon transition score of any integrated oil company.
After a difficult year for oil, Total announced a 2021 investment deal directed towards India’s solar energy sector through AGEL going into the next decade.
The deal means that Total will hold a 50 percent stake in a 2.35GW portfolio of operating solar energy assets owned by AGEL as well as a 20 percent stake in AGEL. It will also have a seat on the company’s board of directors.
Patrick Pouyanné, Total’s Chairman/ceo told the French newspaper, Le Parisien, in September that the firm aims to be among the world’s top five producers of renewable energy.
The company’s operations mix today comprises 55 percent oil, 40 percent gas, and less than 5 percent in renewables. Pouyanné said that by 2050, Total’s operations would be divided into 20 percent oil, 40 percent gas, and 40 percent renewable energy.
BP has made a billion-dollar deal in renewables since announcing its net-zero goal in February 2020 and following that up with a strategy in August to reinvent itself as an integrated energy company from an international oil company.
Last September, BP said it was making its first move into the offshore wind market through a strategic partnership in U.S. offshore wind assets with Equinor. The deal is worth $1.1 billion.
Shell is the only one of the three that has not made a billion-dollar deal in the renewable energy sector since announcing its net-zero goals last April, according to Bloomberg data.
However, the Anglo-dutch company has made smaller investments from hydrogen refueling infrastructure in California to a waste-to-fuels plant in Canada.
All three companies have announced numerous smaller deals which they did not disclose the value, ranging from electric car charging stations to biogas plants.
