Total Increases Renewables Hedge

Total said September 19 it is widening its exposure to renewables by investing in two companies.

It has signed an agreement to acquire an indirect interest of 23% in Eren Re by subscribing to a capital increase for an amount of €237.5mn ($284.7mn), with the possibility of acquiring control of the company after five years. Eren Re was founded five years ago and has a global installed gross capacity of 650 MW in operation or under construction (wind, solar and hydro), with an ambition to achieve more than 3 GW by 2022. Eren Re is currently controlled by French group Eren.

Total’s gas, renewables and power chief Philippe Sauquet said the investment was part of Total’s target of achieving 5 GW of installed renewable capacity within five years: “In line with the Group's integrated strategy along the oil and gas value chains, we are rebalancing our portfolio in renewables between the upstream manufacturing with SunPower and the downstream power production with Eren Re.”  Total became active in solar energy 2011 when it acquired a majority shareholder in US firm SunPower. 

Total is also acquiring GreenFlex, which uses smart metering and equipment management to help clients manage their energy consumption efficiently. It has more than 600 clients across Europe and is forecasting revenues of over €350mn in 2017; the deal is expected to close in 4Q2017.

Influential UK economist Dieter Helm in a book published earlier this year, Burn Out, forecast that the fossil fuel age is coming to an end, that energy firms must adapt their existing business models or face future irrelevance, and advised oil firms to 'harvest and exit' – something arguably that certain European utilities like Dong, E.ON and RWE have already done by divesting their upstream businesses.

Mark Smedley