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TotalEnergies' (TTE) Holdings in AGEL Boost Its Clean Assets

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TotalEnergies SE’s (TTE - Free Report) renewable portfolio under construction has been enhanced by more than 1.4 gigawatts (GW) due to its 20% holding in Adani Green Energy (AGEL). Recently, AGEL acquired 100% stake in SB Energy India that has a total renewable portfolio of 5 GW projects spread across four states in India.

TotalEnergies has been focused on expanding the renewable power generation portfolio through acquisitions, joint ventures, partnerships and organic methods. The company’s long-term goal will be to continue expanding the renewable business till it touches 35 GW of gross production capacity from renewable sources by 2025 and 100 GW by 2030. Its acquisition of controlling stakes in SunPower Corporation (SPWR - Free Report) in 2011 was a positive step taken by the company to expand the renewable business.

TotalEnergies’ Clean Energy Vision

TotalEnergies targets to achieve zero emissions by 2050 and is taking the necessary measures to attain the same. The company is making systematic investments in its operations to achieve clean energy transition goals. The company will invest $13-15 billion per year in the 2022-2025 period and allocate 50% of these investments for growing its activities and the rest for maintaining operations.

Out of the planned growth investment, 50% will be dedicated to the development of new energies, mainly renewables and electricity, and the other half to natural gas, essentially LNG. TotalEnergies is aiming to increase LNG production by 30% and substantially improve biogas output by 2025. Increasing the production of clean sources of fuel and electricity will assist it in lowering global emissions.

Steps Taken by Oil Majors to Cut Emission

TotalEnergies’ management expects that a joint effort will be required from the big oil majors to address the problem associated with emission and climate rise.  

Global integrated oil and gas company Chevron Corporation (CVX - Free Report) also agrees that the way forward in the energy space is by lowering carbon emissions. The company is now targeting to lower 40% carbon emissions from oil production and 26% carbon emission from gas production by 2028 from 2016 levels. ExxonMobil (XOM - Free Report) also announced plans to reduce carbon emissions by 15-20% by 2025 in upstream operation from 2016 levels.

No doubt, positive initiatives have been taken by oil majors to lower emission levels. We expect more efforts from other oil and gas companies in this direction to lower emissions and achieve the climate goal set in the Paris accord.

Price Performance

In the past 12 months, TotalEnergies’ shares have outperformed the industry.

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Zacks Rank

It currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.