Analysis from Westwood Global Energy Group suggests that oil major Total’s renewable power capacity will have outpaced clean energy majors Iberdrola and Ørsted by 2030
The insight highlights the oil and gas major’s ambition to reach 100 GW of renewable power capacity by 2030, a target exceeded only by utility Enel which aims to have 145 GW.
In comparison, clean energy supermajor Iberdrola set targets of 95 GW and Ørsted 30 GW. To meet this target, Total has already invested US$8Bn in renewables and power between 2016 and 2020 with a significant focus on solar PV.
A 50/50 joint venture between Macquarie’s Green Investment Group and Total recently secured rights to a seabed lease in the eastern regions zone off the UK’s East Anglian coast that could deliver up to 1.5 GW of offshore wind generation. In June 2020, SSE Renewables and Total took a final investment decision to proceed with the Seagreen 1 offshore windfarm in the UK, after the oil company entered into an agreement to acquire a 51% stake in Seagreen 1.
Together with Iberdrola, Total also recently prequalified to participate in the tender for Denmark’s next offshore windfarm, the 800-1,000-MW Thor project.
Westwood head of energy transition David Linden said, “Total has set a course to diversify its portfolio, which is reflected by its proposed name change to Total Energies. And it is leading the way – Total’s targets are double that of peers like BP at 50 GW. However, in energy terms renewables will still be the minority in Total’s entire portfolio.
“In future, the combined scale of ambition of clean energy and oil and gas supermajors, together with their focus on onshore wind and solar, could see them compete in high-growth markets,” Mr Linden said.
“Collaboration will be an increasingly important part of the modus operandi as technologies, markets and companies converge, especially in green hydrogen where the boundaries are more blurred.”
Westwood head of consulting Arindam Das said, “It’s not yet clear how the growing renewables portfolio of oil and gas companies will be valued by the investment community.
“In the next decade oil companies are still expected to be underpinned by sizable fossil fuel businesses. Can the renewables portion of their portfolio become of material scale to deliver stable, low-risk returns that investors will accept?
“Or do investors still expect higher risk, higher returns? The answer to these questions will have a great bearing on the energy transition and the oil and gas majors’ role in it.”