Total Buys 3.3GW Solar Portfolio and Signs World’s Largest Corporate PPA…With Itself.

Oil major Total has acquired a 3.3-gigawatt solar project pipeline in Spain and will be the offtaker for 3 GW, enough to power its European operations.

French oil major Total added another 3.3 gigawatts of Spanish solar to its renewables portfolio on Friday as it chases down a target of 25 GW by 2025.

The company also revealed it has signed a corporate power-purchase agreement for 6 terawatt-hours of power from around 3 GW of its Spanish solar portfolio. That makes it the largest corporate PPA in the world. Google signed a 1.6 GW deal across 18 projects last year. Offshore wind giant Ørsted’s 920 MW-deal with Taiwanese chipmaker TSMC is the largest deal for a single project.

Total said the PPA would be enough to power all its European industrial operations by 2025.

The latest project acquisitions come via a deal with the developer Ignis. The first projects will be up and running in 2022, and Total wants all 3.3 GW to be operational in time to contribute to its 2025 target. Total said Ignis will be paid as projects come online.

In February, Total secured access to nearly 2 GW of solar via two separate deals. It also gained access to 850 MW of gas-fired power plant capacity in Spain — and 2.5 million retail customers — from Portuguese utility EDP.

"This decision to invest massively in renewable electricity capacity to supply all our industrial operations in Europe with green energy is concrete proof of our decision to move toward decarbonizing our European operations in line with our new climate ambition,” said Patrick Pouyanné, Total chairman and CEO. “It also demonstrates the value of integrating production, trading and sales in the electricity chain.”

The corporate PPA will count toward Total's complex net-zero targets. It’s aiming to be net-zero across its own emissions (Scope 1 and 2) by 2050. It hopes to achieve net-zero status for Scope 3 emissions — those generated by the use of its products — in Europe only by 2050.

Total’s power business scales up

Total’s 5 GW solar portfolio compares favorably with existing renewable portfolios in Spain. Utility giant Iberdrola has 6 GW of operational onshore wind, 600 MW of operational solar and an early-stage renewables pipeline of 14 GW.

It also takes Total beyond the project portfolio of Portuguese oil firm Galp Energia, which acquired 900 MW of operational solar and 2 GW for development back in January.

The latest deal reinforces Total’s position as the leading oil major in renewables.

"[It] catapults Total to one of the largest solar players in the Iberian market," said Tom Ellacott, senior vice president of corporate research at Wood Mackenzie. "Total will also reduce its Scope 2 emissions by 2 million metric tons per annum through being able to cover its industrial electricity consumption from its solar portfolio under what will be the largest power purchase agreement in the world."

"Total now has the building blocks to establish a meaningful cash flow stream in solar from the mid-2020s," he added.

Away from Spain, the company has also taken a half-stake in a 2.1 GW portfolio of operational PV plants in India owned by a unit of the Adani Group, also in February. In June it took a 51 percent share in the 1,140 MW Seagreen offshore wind project in Scotland. The project could be extended by 340 MW.

It also won a competitive auction in Qatar for an 800 MW solar project as part of a joint venture with Japanese conglomerate Marubeni.

Earlier this month it partnered with Australian bank Macquarie to develop 2 GW of floating offshore wind off the coast of South Korea.

Closer to home, it acquired a 1 GW portfolio of onshore wind in France via the acquisition of developer Global Wind Power.

BP has been receiving plenty of attention for its own net-zero target and the "Reimagining Energy" theme pushed by new CEO Bernard Looney. It is targeting 50 GW of wind and solar by 2030 with an interim 2025 target of 20 GW.

At a recent capital markets event, BP’s EVP of gas and low carbon energy, Dev Sanyal, said it had a firm pipeline of 20 GW and another 21 GW of “early-stage” opportunities on top of that. But BP's more mature pipeline of assets, largely via solar joint-venture Lightsource BP, is now eclipsed by Total.  

25 September 2020

gtm