TotalEnergies (TTE) to Buy Kyon Energy, Boost German Foothold
In a strategic move, TotalEnergies TTE has secured an agreement to acquire Kyon Energy, a German battery storage developer. The nearly $97.8 million (€90 million) deal includes earn-out payments tied to development targets, reflecting TotalEnergies' commitment to advancing its integrated power strategy in Germany.
The acquisition of Kyon Energy will add its 770 MW of battery storage projects to the TTE portfolio, of which 120 MW are operational and 350 MW are under construction. An additional 300 MW stands ready for development by TotalEnergies. Kyon Energy will also add a 2 GW pipeline of advanced-stage projects.
TotalEnergies plans to leverage Kyon Energy's expertise to develop, build and operate projects primarily located in North Germany. This aligns with TotalEnergies' successful 2023 endeavors in the country, including offshore wind farm development, renewable energy aggregation and electric vehicle charging infrastructure.
Kyon Energy's battery storage systems acquisition will allow TotalEnergies to enhance the resilience of the German electricity system, addressing congestion issues, providing flexibility to the power grid, and supporting the rapid expansion of renewable energies.
TotalEnergies' acquisition of Kyon Energy positions the company at the forefront of Germany's energy transition. The strategic move not only strengthens its integrated power strategy but also propels the nation toward a more sustainable and resilient energy future.
Battery Storage Will Play a Role in Energy Transition
Per the International Energy Agency (IEA), grid-scale storage, particularly batteries, will be essential to manage the impact on the power grid and handle the hourly and seasonal variations in renewable electricity output while keeping grids stable and reliable in the face of growing demand.
The solar PV, wind and hydro power plants will play a pivotal role in the clean energy transition, and these renewable power generation units will need battery backups. The batteries will help to store high volumes of clean energy produced during the non-peak hours to be utilized during peak demand hours.
The ongoing technological advances are lowering the cost of setting up utility-scale battery storage projects. The development of lithium-ion batteries is also lowering the cost of developing battery projects and supporting the energy transition. Hence, many utilities have already started to develop battery storage projects.
Portland General Electric Company POR decided to install a 400-megawatt (MW) battery storage project in Oregon, which will lower the usage of fossil fuel-based plants in the region.
IDACORP’s IDA unit, Idaho Power, has plans to install 120 MW of storage to meet its clean energy goals. An 80 MW battery energy storage system is being installed at the company’s Hemingway substation in Owyhee County, and a 40 MW battery energy storage system is being built adjacent to the 40 MW Black Mesa solar project in Elmore County.
NextEra Energy’s NEE unit, Energy Resources, is working on large-scale renewable projects and developing battery storage units. The company has plans to develop storage units in the range of 5,000-6,000 MW in the next few years.
Price Performance
TotalEnergies’ shares have gained 4.5% in the past six months compared with its industry’s growth of 3.7%.
Image Source: Zacks Investment Research
Zacks Rank
TotalEnergies currently has a Zack Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
IDACORP, Inc. (IDA) : Free Stock Analysis Report
Portland General Electric Company (POR) : Free Stock Analysis Report
TotalEnergies SE Sponsored ADR (TTE) : Free Stock Analysis Report
