With the growing importance of renewable energy, major energy companies in oil and gas, and even utility companies, have increased their investment. The industry is seeing more diversified power generation projects, and this is leaning toward renewable energy.
A good example is France-based TotalEnergies which announced that it is making an investment of approximately $580 million along with Casa dos Ventos, a well-known wind and solar company in Brazil. Both companies will begin a joint venture. The company stated that it has a 34 percent stake in this project, which focuses on developing and operating renewable energy projects that Casa dos Ventos has already started.
On the other hand, Casa dos Ventos has a 66% stake in the project and is working with this international partner to improve its renewable energy projects. The company stated that it could develop over 10 GW of renewable energy capacity.
The deal between TotalEnergies and Casa dos Ventos comes after that of ENGIE North America. The company announced that it would acquire 6 GW of battery storage and solar capacity projects from Belltown Power, which is based in the USA.
The Houston-based company is a subsidiary of its France-based parent company and a major player in utilities. It announced in October 2022 that the contract gives them control of 33 projects and about 2.6 GW of standalone storage. They also get 2.7 GW of solar and 700 MW of battery storage.
The project covers different areas, which include the places being powered by the Electric Reliability Council of Texas, the Western Electricity Coordinating Council, PJM Interconnection, and the Midcontinent Independent System Operator.
When announcing this deal, the head of ENGIE NA, who is also the chief renewables officer, stated that adding these solar and battery storage projects to their portfolio provides opportunities for the company to expand its work in the United States.
Rystad Energy in October published a report that announced that the capital investments made in the renewable energy field reached an impressive $494 billion. This is a large upgrade from the $446 billion investment in the oil and gas sector in the same period.
Rystad is a Norway-based research firm, and it announced that this is the first time the investment for renewable energy was more than that for oil and gas. Different major companies in Europe, like TotalEnergies, BP, Shell, Eni, Repsol, and Equinor, all included measures to reduce emissions in their net-zero targets for 2050.
In other cases, some companies in the oil and gas sector are focusing on renewable energy projects to fuel their drilling operations. For example, Chevron announced a deal that it has signed with Algonquin Power and Utilities Corporation. Chevron is one of the first to drill using renewable energy.
The deal includes providing electricity using a 20-MW solar farm in New Mexico to the company’s operations in the Permian Basin. Chevron is known for its track record of running solar projects, from 2003 when it had one to power the operations at the Kern oil field in California. Even Occidental, also known as Oxy, runs a 16-MW solar farm, also in the Permian Basin.
Chevron, Shell, and ExxonMobile are all engaging in long-term power purchase agreements in a quest for renewable source electricity. This helps them collaborate with renewable energy companies and power their oil ad gas operations in a sustainable way.
TotalEnergies has been actively working on expanding its global footprint with renewable energy. The company announced that it has another deal on the table, which involves buying another 15% of the Casa dos Ventos venture after a five-year period. The Brazilian venture stated that the projects involved in the portfolio include 1 GW of renewable energy capacity under construction and another 700 MW already operating onshore wind energy.
Within the five-year period, they expect to construct another 1.6 GW of solar power and 2.8 GW of onshore wind. There is the possibility of other projects which would offer up to 6 GW available. TotalEnergies believes that it is ideal for the merchant power market in Brazil due to its track record in the global market for PPAs and energy trading. The deal comes after Clearway in the United States and Adani Green in India.
The deal with Casa dos Ventos has given TotalEnergies a lead in the renewable energy market in Brazil, and this is known as one of the most flexible markets in the world. The company is focusing on using the growth of deregulated power markets to aid its energy transition.
Casa dos Ventos has developed about ¼ of the operating wind power in its company, surpassing 20 GW of installed onshore wind in the previous year. This is suitable for TotalEnergies as the company wants to have 35 GW and 100 GW of renewable energy by 2025 and 2030.
Another deal that TotalEnergies has taken is with Adani Enterprises Ltd in June 2022. This is to purchase a 25% interest in Adani New Industries, which will be the platform of the enterprise. The goal of the company is to make one million metric tons of green hydrogen yearly by 2030. It is already on its way, with 30 GW of new renewable power.
This is not the first time that TotalEnergies is working with Adani to expand its interest in renewable energy. In 2020, the French group purchased a 20% minority interest in Adani Green Energy, Ltd. At the time of this deal, the latter was the largest solar developer globally. TotalEnergies also took a 50% stake in the solar developer’s operating solar assets, with a capacity of 2.35 GW.
This deal was only one month after TotalEnergies acquired 50% of Clearway Energy Group, a major renewable energy company in the United States. At the time of the deal, Clearway had solar and wind assets with a capacity of 7.7 GW, while the renewable energy and storage projects were up to 25 GW.
Aside from TotalEnergies, ENGIE NA is also making moves in the renewable energy industry. At the end of June, the company announced that it has a renewable energy capacity of 3.9 GW in North America. It is focused on expanding this to 4.8 GW by the end of the year.
The deal that ENGIE NA has with Belltown Power US is one of the ways they plan to achieve this, as the projects from the latter will speed up the former’s role in the energy transition. Aside from this, the acquisition of Belltown Power is focused on ENGIE’s long-term goal to get an installed renewable energy capacity of 80 GW by 2030.
It is now operating more facilities like the 3.3 GW of battery storage projects, which will be an enabler of its grid’s reliability and resilience. Belltown Power US is also pleased to work with ENGIE because this moves the company forward as a greenfield developer.
