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TotalEnergies (TTE) Buys Xlinks Stake, Focuses on Clean Power

TotalEnergies TTE announced that it invested nearly $25.4 million (£20 million) to acquire a minority stake in Xlinks First Limited. This strategic move from TotalEnergies is in sync with its long-term vision to achieve net zero emissions by 2050.

Xlinks plans to develop a giant renewable project in Morocco (combining solar and wind) to supply green electricity to the United Kingdom through the installation of high-voltage direct current subsea cables coupled with large battery energy storage. This giant renewable project will be able to provide clean and reliable power to more than 7 million British homes.

TotalEnergies will not only provide the essential capital needed for this massive project but will also provide expertise in different areas and critical problems the project might encounter in the near future.

TotalEnergies Clean Energy Vision

TotalEnergies is working relentlessly to build a world-class cost-competitive portfolio, combining renewables (solar, onshore and offshore wind) and flexible assets (combined cycle gas turbine  storage) to deliver clean electricity to its customers.

In 2022 end, TTE had a gross renewable electricity generation installed capacity of 17 gigawatts. The company added more renewable projects to its portfolio during 2023 and will continue to expand this business to grow its power generation to more than 100 Terawatt hours by 2030.

The company is gradually building a portfolio of low-carbon businesses that could account for 15-20% of sales by 2040. TTE is making strategic acquisitions to expand its renewable operations. The company will make substantial investments each year in its renewable business to expand operations globally through organic and inorganic means.

Clean Energy in Focus

A transition in the energy space is evident, with industries now focusing on lowering emissions and planning to use energy generated from clean sources. Utilities are expanding clean energy generation portfolios. Since the potential in the renewable market is vast, it draws operators from the oil & energy space.

Per the latest International Energy Agency release, renewable energy will account for nearly 50% of the global electricity mix, up from 30% at the present level. Undoubtedly, this will create a massive demand for renewable projects and the companies that are investing in the clean energy space can enjoy the enormous increase in demand.

Along with TotalEnergies, other oil and gas companies like ExxonMobil Corporation XOM, BP plc BP and Chevron Corporation CVX are also adopting measures to reduce emissions from operations.

To meet the growing demand for clean fuels, ExxonMobil has been working to reduce emissions by developing more efficient fuels. The company intends to invest billions of dollars in emission-reduction projects over the next few years. XOM has developed an ambitious roadmap to achieve net-zero Scope 1 and net-zero Scope 2 GHG emissions by 2030 for unconventionally operated assets.

BP has established an ambitious energy transition strategy to take advantage of the growing demand for sustainable energy. The company plans to reduce emissions from its operations by 30-35% by 2030.

CVX is making efforts to lower methane emissions. The company has adopted an upstream methane-intensity target of 2.0 kg CO2e/boe by 2028, which represents a 57% reduction from its 2016 baseline. It has reduced its methane intensity by more than 50% and is actively working to end routine flaring by 2030.

Price Performance

Over the past year, shares of TTE have surged 9.2% compared with the industry’s growth of 0.8%.

 

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Zacks Investment Research


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Zacks Rank

TotalEnergies currently has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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