Dive Brief:
- TotalEnergies, a French multinational energy company, has purchased all of Shell’s onshore renewable energy assets in operation and development in Europe, the companies announced in separate releases Monday.
- TotalEnergies will acquire around 4 gigawatts of operational and in-development onshore wind and solar generation, according to a press release. The oil major simultaneously announced it would sell a 50% stake in a separate 1.2 GW renewables portfolio to investment firm KKR, in a deal valuing the portfolio at €1.8 billion ($2.07 billion).
- For Shell, the sale of its European renewable assets comes after the company sold off its India-based renewables business last month for $1.8 billion. For TotalEnergies, the deals come as the energy company fights a French court decision ordering the company to align its business with climate goals.
Dive Insight:
TotalEnergies said the purchase of Shell’s European renewable portfolio, combined with the deal with KKR, will help with capital allocation in its renewables sector as it pursues a goal to reach 12% return on average capital employed by 2030.
TotalEnergies will wholly own Shell’s solar, wind and battery assets that are in operation or under construction across Italy, the Netherlands, the United Kingdom and Spain. Currently, the portfolio includes 500 megawatts of operational capacity, with 3.5 GW in the development pipeline, according to TotalEnergies’ Aug. 3 press release.
Stéphane Michel, TotalEnergies president of gas, renewables and power, said in the release that the acquisition of Shell’s onshore renewables portfolio “strengthens our power generation positions in selected key deregulated markets across Europe and supports the implementation of our integrated strategy across the electricity value chain.”
Shell sold Sprng Energy, its India-based renewables business to Aditya Birla Renewables Limited last month and sold a “substantial portion” of its electric vehicle charging network over the past year, as well.
Machteld de Haan, Shell’s president of downstream renewables and energy solutions, said the company is working on “actively managing” its power portfolio, and the agreement with TotalEnegies is part of that work. Haan said in Shell’s press release that the oil giant is “recycling capital and prioritizing areas where [it has] differentiated capabilities and can create the most value over time.”
Both deals are expected to close by the end of the year. The financial terms of the agreement between Shell and TotalEnergies was not disclosed.
The 1.2 GW renewables portfolio KKR is receiving a stake in has been “already largely developed” and includes onshore solar and wind assets in Germany, Spain, France and Poland according to TotalEnergies. The energy company said it already sells or markets the electricity sold from those assets.
TotalEnergies reported having a European renewables portfolio that includes nearly 10 GW of capacity installed or under construction and an additional 27 GW in development, according to its press release.
Earlier this year, TotalEnergies said it would reassess its 2050 net-zero goals and announced it would not set a transition plan. The company also left the U.S. offshore wind market this year, after agreeing to a $1 billion settlement with the U.S. Department of Interior to relinquish a pair of offshore wind leases.
