Total Oil bets big on renewables – With insights from The Wall Street Journal

French oil group Total is the one global oil major South Africans should keep an eye on. Apart from its headline grabbing double strikes that confirm a massive natural gas field off the Southern Cape, in September 2019 Total paid $3.9bn for Anadarko's 26.5% stake in Mozambique's liquified gas project. With that context, the The Wall Street Journal's article below on Total's aggressive move into solar energy is of more than passing interest for us. A local fleet of solar and wind energy companies were created through SA's much admired renewables programme. Total clearly likes this part of the world, and as it has committed to invest $3bn annually in acquisitions of renewable businesses, the French major could be the well-heeled consolidator SA's renewables sector has waited for. – Alec Hogg.Use Spotify? Access BizNews podcasts here..Use Apple Podcasts? Access BizNews podcasts here..___STEADY_PAYWALL___.Oil giant Total buys stake in world's biggest solar developer.French energy company to pay $2.5 billion for 20% of Adani Green Energy.By Sarah McFarlane of The Wall Street Journal.Updated Jan. 18, 2021 4:10 pm ET.LONDON—French energy giant Total SE TOT 1.70% said it would pay $2.5 billion for a 20% stake in the world's largest solar developer, the latest move by an oil major to expand in renewable power..Total said Monday the investment in Adani Green Energy Ltd. 541450 +1.60% would help it meet its targets for generating more power from low-carbon sources amid a continuing global transition away from fossil fuels—a shift some analysts say is being accelerated by the pandemic..The company, along with other oil majors including BP BP 1.61% PLC and Royal Dutch ShellRDS.A 1.14% PLC, has pledged to increase spending on renewable energy such as wind and solar power in an effort to reduce carbon emissions. Total plans to spend $3 billion a year on renewables by 2030, around 20% of its annual investment budget and up from $2 billion last year.The Adani deal gives Total exposure to a leading renewables business in India, one of the world's fastest-growing markets for energy demand. Adani has 54 wind and solar projects in operation across the country, including one of the world's largest solar projects in Kamuthi, Southern India. Based on existing generating capacity and the projects in its pipeline, Adani is the world's largest developer of solar power, Total said.As part of the deal, Total is also taking a 50% stake in a portfolio of Adani's solar assets and getting a seat on the company's board. The move will help Total toward its goal of having 35 gigawatts of renewable power capacity by 2025, up from around 7 gigawatts last year."Given the size of the market, India is the right place to put into action our energy transition strategy based on two pillars: renewables and natural gas," said Total Chief Executive Patrick Pouyanné.Total and Adani Group, 512599 +2.45% one of India's largest infrastructure conglomerates, have previously made other joint investments, including in liquefied-natural gas.Major oil companies have boosted their activities in renewable energy in recent years, anticipating that demand for oil will eventually decline, as more of the global economy becomes electrified. New technologies such as electric vehicles, for example, are expected to increase demand for electricity, while denting requirements for oil-based transport fuels such as gasoline and diesel.Monday's deal isn't the first time Total has invested in solar. In 2011, the company bought a majority stake in U.S. solar panel manufacturerSunPower Corp. However, following several years of losses, SunPower spun off its panel-making business in August to focus on solar-panel installations. Total remains a shareholder in both SunPower and the new Singapore-based company Maxeon Solar Technologies Ltd.Other major oil companies have also invested in the solar industry. BP took a stake in Lightsource Renewable Energy in 2017 and has since boosted its holding. The same year, Shell invested in Singapore-based Sunseap Group Pte Ltd., followed by an investment in Cleantech Energy Corporation Pte Ltd.'s solar business in 2018.Write to Sarah McFarlane at sarah.mcfarlane@wsj.comCopyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8Appeared in the January 19, 2021, print edition as 'Oil Giant Buys Stake In Big Solar Developer.'

Total Oil bets big on renewables – With insights from The Wall Street Journal

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