TotalEnergies expands renewables business with EUR1.5 billion investment
French energy company TotalEnergies announced that it has increased its stake in Total Eren from close to 30% to 100% for a net investment of around EUR1.5 billion (USD1.66 billion). Total Eren will be fully integrated within TotalEnergies’ Renewables business unit. The deal follows the strategic agreement signed between TotalEnergies and Total Eren in 2017, which granted TotalEnergies the right to acquire all of Total Eren (formerly EREN RE) after a five-year period.
As part of its ambition to get to net zero by 2050, TotalEnergies is building a portfolio of activities in electricity and renewables. At the end of March 2023, TotalEnergies’ gross renewable electricity generation installed capacity was 18 gigawatts (GW). TotalEnergies will continue to expand this business to reach 35 GW of gross production capacity from renewable sources and storage by 2025, and then 100 GW by 2030 with the objective of being among the world’s top five producers of electricity from wind and solar energy.
Total Eren has 3.5 GW of renewable capacity in operation worldwide and a solar, wind, hydroelectric and storage projects pipeline of more than 10 GW in 30 countries, of which 1.2 GW are in construction or late-stage development.
TotalEnergies will leverage Total Eren’s 2 GW assets in operation in merchant countries (notably Portugal, Greece, Australia, and Brazil) to build up its integrated power strategy. TotalEnergies will also benefit from Total Eren’s footprint and ability to develop projects in other countries such as India, Argentina, Kazakhstan, or Uzbekistan.
Further to its activities as a renewable energy producer, Total Eren has launched pioneering green hydrogen projects in recent years, located in various regions, such as North Africa, Latin America, and Australia. These green hydrogen activities will be pursued through a new partnership in an entity named TEH2, which will be 80% owned by TotalEnergies and 20% owned by EREN Group.
“Our partnership with Total Eren has been very successful, as shown by the size and quality of the renewables portfolio. With the acquisition and integration of Total Eren. we are now opening a new chapter of our development as the expertise of its team and its complementary geographical footprint will strengthen our renewable activities and our ability to build a profitable integrated power player,” said Patrick Pouyanné, chairman and CEO of TotalEnergies.
In March, the company said it would increase the share of investments in low-carbon energies by USD1 billion to USD5 billion in 2023, from the total planned range of USD16-18 billion. By 2030, TotalEnergies plans to invest USD14 billion to USD18 billion per year, depending on the cycle, of which a third will be in low-carbon energies, about 30% will be dedicated to the development of new oil and gas projects, and the remainder devoted to maintenance of the hydrocarbon portfolio.