What: TotalEnergies is increasing its stake from 30% to 100% in green energy company Total Eren.

Why: The French energy firm is looking to diversify its energy interests and increase its portfolio of renewable energy assets.

What Next: Total Eren teams will now be fully integrated within TotalEnergies’ renewables business unit, which will also oversee green hydrogen projects that Total Eren has launched.

 

French multinational energy company TotalEnergies revealed on July 25 that it will acquire complete control of joint venture Total Eren.

The move signals TotalEnergies’ desire to diversify its energy holdings and increase its portfolio of green energy assets.

Previously, TotalEnergies had held a 30% stake since 2017 in Total Eren, which is valued at an enterprise value of €3.8bn and has a workforce spread across 20 countries. TotalEnergies will buy out investors Bpifrance, Tikehau Capital, Peugeot Invest and NextWorld.

Total Eren possesses 3.5 GW of renewable capacity in operation across a handful of industries including solar, hydroelectric, wind and battery storage. The company also has a pipeline of more than 10 GW, of which 1.2 GW are either under construction or in late-stage development.

In particular, the deal gives TotalEnergies increased exposure in the renewables sector in emerging markets, given Total Eren’s large footprint in countries such as India, Argentina, Uzbekistan and Kazakhstan.

Similarly, in Africa, Total Eren has a number of projects with more than 150 MWp of installed capacity on the continent spread across Egypt, Uganda and Burkina Faso. Moreover, the company is in the midst of developing projects in eight other African countries, namely South Africa, Zimbabwe, Zambia, Tunisia, Morocco, Mauritania, Senegal and Tanzania.

The deal also gives TotalEnergies increased exposure to the nascent green hydrogen sector. Total Eren has already launched green hydrogen projects in North Africa, Latin America and Australia. The projects will now be managed by a new partnership in an entity called TEH2, in which TotalEnergies will hold an 80% stake and the remaining 20% interest will be held by Eren Group.

 

TotalEnergies targets top five spot in solar and wind

The move to fully acquire Total Eren is the latest step forward taken by TotalEnergies as it seeks to push its way into a top five spot by 2030 for global production of solar and wind generated electricity across the entire renewable electricity value chain, stretching from production to storage to trading and sales.

In 2021, TotalEnergies began ramping up its efforts in the renewables sector. Investment that year in renewables and electricity accounted for a quarter of total spend.

The company looks set to continue this momentum as well. A target of having 100 GW of renewable electricity installed capacity by 2030 has been set, marking a 10-fold increase on the 10 GW it possessed in 2021.

In the near term, TotalEnergies has set a target of 35 GW of renewable electricity installed capacity by 2025. It will lean heavily on solar PV, which will make up three-quarters of the 35 GW it is targeting to develop.

However, the company is also planning to see significant growth in offshore wind and will continue to expand on its development of both fixed-bottom wind turbines as well as floating wind turbines.

Total’s recent shift towards renewables marks the latest pivot by an oil major to renewables. In 2020, BP CEO Bernard Looney announced his intentions to transition away from fossil fuels and reinvent BP as a “leaner, faster-moving and lower-carbon company.” 

Similarly Equinor, which rebranded from Statoil in 2018 to reflect its transformation from an oil and gas producer to a broad energy company, has been significantly ramping up its investment in green energy.

Last year, about 20% of the Norwegian company’s gross investments were in 2022, almost doubling from 11% in 2021. The company is targeting having between 12 to 16 GW of renewable energy capacity by 2030, a meteoric rise from 0.7 GW it possessed in 2021.

Meanwhile, a handful of oil majors such as TotalEnergies, BP, Equinor, Shell, Eni, ExxonMobil and Chevron have all vowed to reach net zero by 2050.

In 2022, global investment in the energy transition hit a new record, reaching $1.1 trillion according to BloombergNEF, and oil majors are increasingly diversifying their assets. With the acquisition of Total Eren and a pledge to invest $5bn in low-carbon energies in 2023, TotalEnergies is making it clear it intends to be a major player in the energy transition.