Total Boosts Green Investment Push with Stake in Eren RE

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--French oil and gas major Total S.A. (NYSE:TOT) (Paris, France) continued its green investment drive by agreeing to buy a 23% stake in Eren Renewable Energy (Eren RE) (Luxembourg) for 237.5 million euro ($279 million).

EREN RE, which will now be known as Total Eren, has a diversified asset base, notably wind, solar and hydro, with a global installed gross capacity of 650 megawatts (MW) in operation or under construction. The company is aiming to achieve a global installed capacity of more than 3,000 MW within five years. Total has the option to buy the remainder stake of 67% in the company after a five-year period.

"EREN RE's momentum will allow us to accelerate our growth in solar energy and move us into the wind power market," explained Philippe Sauquet, Total's president of Gas, Renewables and Power. "The agreement with EREN RE is a major step towards our objective of achieving 5 gigawatts (GW) of installed capacity in five years. In line with the Group's integrated strategy along the oil and gas value chains, we are rebalancing our portfolio in renewables between the upstream manufacturing with SunPower and the downstream power production with EREN RE."

The deal gives Total a foothold in the wind power generation market. The ongoing development of EREN RE's solar farm business will be mainly focused on emerging countries where the demand for electricity is growing

Total entered the renewable energy market in dramatic fashion 2011 when it purchased a majority stake in one of the largest U.S. solar energy companies, SunPower Corporation (NASDAQ:SPWR) (San Jose, California), for $1.4 billion, the biggest green investment by a major oil and gas company at the time. It also heralded the ongoing investment shift toward green energy by many in the oil and gas sector.

Industrial Info it tracking the change in investment patterns. In March, Royal Dutch Shell plc (NYSE:RDS-A) (The Hague, Netherlands) announced that it was planning to dramatically increase its investment in renewable energy to $1 billion a year by the end of the decade. For additional information, see March 31, 2017, article - Shell Ups Renewables Spending to $1 Billion a Year.

In 2016, Statoil ASA (OSE:STL) (Stavangar, Norway) announced a $200 million renewables investment fund, which would be used to finance projects in Europe and the U.S. The company also is behind the world's first floating offshore wind project, the 30-MW Hywind Scotland project. For additional information, see February 24, 2016, article - Statoil Launches $200 Million Renewable Energy Fund and July 6, 2017, article - Norway Floating First Offshore Turbines to Scotland.

Analysis from Wood Mackenzie Limited (Edinburgh, Scotland) released this summer suggested that major energy companies may be committing up to a fifth of their total investment in green energy projects after 2030 as hydrocarbons production declines. For additional information, see June 20, 2017, article--Oil Industry Eyes Renewable Energy for Future Growth.

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