French oil giant Total, which is working to transform itself into a wider energy industry company, will outpace green energy majors Iberdrola and Ørsted on renewable power capacity by 2030. This is according to analysis from energy intelligence group Westwood.
The insight highlights the oil and gas major’s ambitions to reach 100GW of renewable power capacity by 2030, eclipsed only by utility Enel which aims to have 145GW.
In comparison, clean energy supermajor Iberdrola set targets of 95GW and Ørsted 30GW. To meet this target, Total has already invested $8bn in renewables and power between 2016 and 2020 with a significant focus on solar PV, Westwood said. To remind, Total last week also announced it would change its name as part of a drive to diversify and grow renewable power and electricity production. The new name will be TotalEnergies.
"Total has set a course to diversify its portfolio, reflected by its proposed name change to Total Energies last week. And it’s leading the way – Total’s targets are double that of peers like BP at 50GW. However, in energy terms renewables will still be the minority in Total’s entire portfolio,” says David Linden, Head of Energy Transition at Westwood.
"In future, the combined scale of ambition of both clean energy and oil and gas supermajors, together with their focus on onshore wind and solar, could see them compete in high growth markets. 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,” explains Linden.
The research reviews the portfolios of European oil and gas majors BP, Shell, Total, Repsol, ENI, and Equinor alongside clean energy supermajors Iberdrola, Enel, NextEra Energy and Ørsted. In addition to renewable power capacity comparisons, the insight highlights key technologies, portfolio investments and growth regions for each company, Westwood said.
Arindam Das, Head of Consulting at Westwood adds: “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.”
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