September 29, 2023 [Yahoo Finance]- TotalEnergies SE TTE announced that it has completed the acquisition of Ombrea, a prime operator in Agrivoltaics space. Ombrea has expertise in combining agriculture and green energy generation. The company has built ten sites and studied around fifty crop varieties to optimize the synergies between agricultural production and solar energy.
TotalEnergies’ acquisition of Ombrea is in sync with its long-term plan to lower its carbon footprints and gradually build a portfolio of low-carbon businesses that could account for 15-20% of sales by 2040.
This acquisition will also enable TTE to accelerate the development of its portfolio of 1.5 GW of agrivoltaic projects that meet the criteria set out under the French Renewable Energy Acceleration Law adopted in March 2023.
Focus on Clean Energy
The company is focused on emission reduction and generating energy from alternate and clean sources. It strives to become a net-zero carbon emission company by 2050 and has taken the necessary steps to achieve the target. The company is gradually building a portfolio of low-carbon businesses that could account for 15-20% of sales by 2040.
TotalEnergies has been expanding its clean energy operation through acquisitions, partnerships and mergers with other clean energy operators. Recently, the firm announced a new clean energy joint venture with Adani Green Energy Limited (AGEL). Under this agreement, TTE will invest $300 million and hold a 50% stake in the new joint venture, with AGEL holding the rest.
It aims to achieve net zero emissions by 2050 and have a gross renewable power generation installed capacity of 19 gigawatts (GWs) as of July 2023. The company plans to expand its business to reach 35 GWs of gross production capacity from renewable sources and storage by 2025 and 100 GWs by 2030.
Investing in Renewables Rising
Given the huge prospect of renewable energy in the global energy mix, 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.
The company’s long-term (three- to five-year) earnings growth rate is 21.39%. It delivered an average earnings surprise of 5.2% in the last four quarters.
BP has established an ambitious energy transition strategy to take advantage of the growing demand for sustainable energy. The company plans to reduce emissions by 30-35% from its operations by 2030.
BP’s long-term earnings growth rate is 6.51%. The company delivered an average earnings surprise of 7.7% in the last four quarters.
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.
CVX’s long-term earnings growth rate is 14.27%. The company delivered an average earnings surprise of 4.8% in the last four quarters.
Price Performance
In the past year, shares of TotalEnergies have risen 41.9% compared with the industry’s 28.3% growth.
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