Major Energy Players Seal Big Deals for Renewables

The world's oil and gas majors, along with some of the largest utility companies, continue to invest in renewable energy as they develop diversified power generation project portfolios. Among the latest is France's TotalEnergies, which in late October announced an investment of about $580 million into a joint venture (JV) with Casa dos Ventos, a major wind and solar player in Brazil. Paris-based TotalEnergies said it will take a 34% stake in the new venture that includes support to develop and operate renewable energy projects already underway by Casa dos Ventos. The Brazilian company, holding the other 66% of the joint venture, had sought a large international partner to further its renewable energy installations. The groups said the deal has the potential for development of more than 10 GW of renewable energy power generation capacity.

The TotalEnergies' deal comes on the heels of ENGIE North America's (ENGIE NA's) announcement in late October that the company would acquire 6 GW of solar and battery storage capacity projects from Belltown Power U.S. Houston, Texas-based ENGIE NA, a subsidiary of the France-based utility giant, said the deal includes 33 projects and includes about 2.7 GW of solar paired with 700 MW of battery storage, and 2.6 GW of standalone storage. The group said the projects are in several areas, including those served by PJM Interconnection, Electric Reliability Council of Texas (ERCOT), the Midcontinent Independent System Operator, and the Western Electricity Coordinating Council. The mix of solar, paired and stand-alone storage across a wide set of geographies both complements our existing portfolio as well as provides opportunities for expansion into new areas in the United States," said Dave Carroll, chief renewables officer and head of ENGIE NA, in a statement.

A report from Rystad Energy, published in October, found that capital investments in renewable energy had reached $494 billion this year, compared to $446 billion for oil and gas during the same period. Rystad, a Norway-based research firm, said it was the first time that investment in renewables topped funding for oil and gas projects. Several European oil and gas majors, including BP, Eni, Equinor, Repsol, Shell, and TotalEnergies, have announced net-zero targets for 2050, and a few have tied executive compensation to emissions reduction measures.

1. Companies involved in oil and gas exploration are continuing to invest in renewable energy, including developing projects to power their field operations. Source: Shutterstock

Some oil and gas companies are building renewable energy projects to power their drilling operations (Figure 1). Chevron, among the first to power drilling with renewable energy, recently announced a deal with Algonquin Power and Utilities Corp. for a 20-MW solar farm in New Mexico to provide electricity for Chevron's operations in the Permian Basin. Chevron as far back as 2003 had a solar project powering operations in California's Kern oil field. ExxonMobil and Shell, along with Chevron, are sourcing renewable electricity to power their oil and gas operations by signing long-term power purchase agreements (PPAs) with renewable energy companies. Occidental, today known better as Oxy, has a 16-MW solar farm in the Permian in Texas.

TotalEnergies said it has an option to purchase another 15% of the Brazilian venture after a five-year period. Casa dos Ventos said projects in the JV's portfolio include 700 MW of operating onshore wind, along with another 1 GW of capacity under construction. Another 2.8 GW of onshore wind, and 1.6 GW of solar power, are under well-advanced development" and due to enter service within five years, according to the company. Casa dos Ventos also said another 6 GW of additional projects could be part of the JV.

TotalEnergies in the statement announcing the deal said its experience in the global market for PPAs, and its background in energy trading, is well-suited to Brazil's merchant power market. After Adani Green in India and Clearway in the U.S., I am delighted with this new major partnership in Brazil, with Casa dos Ventos, the leader in onshore wind energy," said TotalEnergies CEO Patrick Pouyanne. With this transaction, TotalEnergies acquires not less than a leading position in the Brazilian renewable energy market, one of the most dynamic merchant markets in the world. This market fits our strategy of taking advantage of the growth of deregulated power markets, which is crucial to the energy transition."

Mario Araripe, CEO of Casa dos Ventos, said, TotalEnergies' global footprint will contribute to the expansion of our client portfolio and enhance our knowledge in new fields of the energy transition." The company has said it is responsible for the development of about a quarter of the operating wind power in Brazil. The country last year announced it had surpassed 20 GW of installed onshore wind.

TotalEnergies has announced a goal to have 35 GW of capacity in its renewable energy portfolio by 2025, and 100 GW by 2030. TotalEnergies in June of this year entered into an agreement with Adani Enterprises Ltd. (AEL) to acquire a 25% interest in Adani New Industries Ltd. (ANIL). The companies at that time said, ANIL will be the exclusive platform of AEL and TotalEnergies for the production and commercialization of green hydrogen in India. ANIL will target a production of one million metric tons of green hydrogen per year [Mtpa] by 2030, underpinned by around 30 GW of new renewable power generation capacity, as its first milestone."

TotalEnergies in 2020 acquired a 20% minority interest in Adani Green Energy Ltd. (AGEL), which at that time was the largest solar developer in the world. The French group also took a 50% stake in a 2.35 GW portfolio of operating solar assets owned by AGEL, with the deal representing a total investment of $2.5 billion. The deal with Adani came one month after TotalEnergies announced it was buying 50% of major U.S. renewable energy company Clearway Energy Group. Clearway at that time said it held 7.7 GW of operating solar and wind assets, with a 25-GW pipeline of renewable energy and energy storage projects, including 15 GW in advanced development.

ENGIE NA, meanwhile, said it owned 3.9 GW of renewables in North America at the end of June, and expects to have 4.8 GW of operating renewable energy facilities by the end of the year. Carroll said of ENGIE NA's deal with Belltown Power U.S., These projects are a tremendous addition to our existing renewables pipeline and will help to further accelerate ENGIE's role in the energy transition ... the 3.3 GW of battery storage projects will be a critical enabler of flexibility and supports the balance of the grid to improve its reliability and resilience."

Paulo Almirante, ENGIE's senior executive vice president for renewable, energy management, and nuclear activities, said the acquisition from Belltown Power is a step toward achieving ENGIE's goal of 80 GW of installed renewable capacity by 2030. This acquisition is a perfect illustration of ENGIE's strategy to accelerate our investments in renewable energy in our key markets. It is an important step towards achieving our goal of 80 GW of installed renewable capacity by 2030," Almirante said.

Hernan Farace, CEO of Belltown Power U.S., in a statement said, We are very proud of having completed this transaction with ENGIE, which marks another great milestone in the journey of Belltown as a greenfield developer. The ENGIE team is very knowledgeable and has the breadth and depth of expertise to bring these projects into operations."

-Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).

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