TotalEnergies aims to take full control of French renewables player Total Eren next year as part of a plan to grow its energy transition business.
This acquisition will boost the French supermajor’s wind and solar renewables portfolio by giving it 100% control of key mega-projects in which it currently holds a minority interest derived from its 29.6% stake in Total Eren.
In particular, the company has some ambitious plans to develop two 10 GW green hydrogen schemes in Chile and Mauritania.
TotalEnergies chief executive Patrick Pouyanne told analysts recently: “We will exercise next year the call option we have on Total Eren. We will acquire the 70% stake at multiples that were negotiated in 2016 before the hike (in value) of renewables companies.”
“Total Eren will be fully integrated into TotalEnergies,” he said during the supermajor’s investor day in late September.
In September 2017, TotalEnergies (then Total) acquired an indirect 23% stake in Eren for €237.5 million ($245 million at current prices) whose name was subsequently changed to Total Eren.
This agreement – which was rubber stamped in December 2017 - also gave Total the possibility to take over full control of Eren after a period of five years.
In 2019, the French giant increased its stake in the capital of Total Eren to nearly 30% - held directly and indirectly.
Total Eren’s website states that the company has 3700 MW of renewable energy assets in operation or under construction.
In addition, proposed projects include a 10GW green hydrogen scheme in Chile that is due online in 2028 and aims to supply green ammonia to Europe.
This week, Total Eren joined forces with Germany’s VNG to import green ammonia into Europe starting in six years’ time.
VNG plans to construct a hydrogen and carbon hub in near Rostock in Germany, with the company in talks with customers to evaluate future demand for green ammonia and green hydrogen, and to conclude initial purchase agreements.
At the end of 2021, Total Eren secured land positions and launched feasibility studies to build a large-scale green hydrogen project in the Magallanes region of Chile.
The H2 Magallanes project will consist of up to 10-gigawatts of wind turbines, designed to generate 800,000 tonnes of hydrogen per year, which will be partially transported by ship from Patagonia to Germany as green ammonia.
Commenting on the partnership, VNG chief executive Ulf Heitmüller said. “For us, cooperating to build a green hydrogen import value chain with such a renowned renewable energy player as Total Eren is another important step on the journey to a functioning hydrogen market in Germany and Europe.
“Because we want to be and remain one of the most important energy providers in Germany, as well as a reliable partner for our customers, starting from our core competencies in gas and critical infrastructure, we are working along the entire gas value chain on a sustainable, secure supply and, in the long term, climate-neutral energy system of the future.”
David Corchia, chief executive of Total Eren, added: “I am confident that our fruitful alliance will efficiently tackle today’s energy challenges while fulfilling the needs of VNG’s customers.”