TotalEnergies aims to take full control of French renewables player Total Eren next year as part of a plan to grow its energy transition business.
According to Upstreamonline, this acquisition will boost the French supermajor’s wind and solar renewables portfolio by giving it 100 percent control of key mega-projects in which it currently holds a minority interest derived from its 29.6 percent stake in Total Eren.
“By partnering with Eren, we are leveraging a team that has a proven track record in renewable power production, and we are investing in an additional asset to accelerate our profitable growth in this segment, in line with our ambition to become the responsible energy major,” said Patrick Pouyanné, Chairman and CEO of Total.
Eren, which has a portfolio of wind, solar and hydraulic assets, will also be renamed Total Eren upon completion of the transaction.
Findings by BusinessDay showed TotalEnergie’s shares have also significantly underperformed its British rivals, even after the company reported record profit in the third quarter of 2022 thanks to its thriving oil and gas operations and near-zero debt.
Apart from TotalEnergies, BP and Shell have all set out ambitious plans to shift towards low-carbon and renewable energies in the coming decades in an effort to slash greenhouse emissions to net zero.
While their spending remains mostly focused on oil and gas, they aim to grow investments in low-carbon in the coming years.
TotalEnergies had a portfolio of 7.4 gigawatts (GW) of net installed renewables capacity by the end of September, according to company data, following investments such as a $2 billion partnership with India’s Adani Group last year and the acquisition of a 50% stake in Clearway, one of the largest U.S. renewables firms.
BP, by comparison, has so far built 2GW of operating renewables capacity, partly through its 50 percent stake in Lightsource BP, one of the world’s top solar producers.
Shell’s net capacity is slightly higher at 2.2GW, with acquisitions including U.S. producer Savion and Indian renewables platform Sprng Energy earlier this year.
It is a similar story with the three firms’ pipeline of projects under construction or approved for development, with 45.2GW for TotalEnergies, 26.9GW for BP and 5.2GW for Shell.
TotalEnergies aims to have 100GW of gross renewables capacity by 2030 while BP targets 50GW of net renewables. Shell has not set a capacity target but aims to trade 530 terawatt hours of electricity over the period.
TotalEnergies has also reduced its debt faster than its two rivals and could be net debt-free by the end of this year, giving it more flexibility to invest and acquire.
The ability of BP, Shell and TotalEnergies to enhance returns through optimising ownership, the funding mix, marketing and integration into their overall offerings will be key to the total returns achieved,” Moody’s said in a note.
It also noted the three companies’ investments in projects and infrastructure spanning electric vehicle charging to hydrogen, saying the ultimate profitability would remain uncertain for years to come.