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TotalEnergies (TTE) to Develop Solar Projects in New Caledonia

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TotalEnergies SE (TTE - Free Report) announced that it will develop clean energy and energy storage projects in New Caledonia. Within the 2022-2025 time period, TotalEnergies will develop ground-based photovoltaic arrays having a total capacity of 160 megawatts (MW) and energy battery storage capacity of 340 MWh in successive phases.

Per a 25-year renewable power purchase agreement, the clean energy produced from the solar projects will supply power to industrial operations of Prony Resources New Caledonia. TotalEnergies will use its expertise in solar projects to build a 160-MW solar project, with the first phase of 30 MW expected to come online by 2023. Once this project is fully operational, it will be sufficient to meet 67% energy needs of Prony Resources New Caledonia and significantly lower carbon emissions.

TotalEnergies’ Clean Energy Vision

TotalEnergies targets to achieve zero emissions by 2050 and is taking necessary measures to attain the same. TTE is making systematic investments in operations to achieve clean energy transition goals. TotalEnergies maintained planned investment in the range of $1.5-$2 billion in low-carbon electricity generation.

At the end of September 2021, TotalEnergies' gross renewable electricity generation capacity was 10 GW. TotalEnergies will continue to expand this business to reach 35 GW of gross production capacity from renewable sources by 2025 and 100 GW by 2030. TotalEnergies is gradually building a portfolio of low-carbon businesses that could account for 15-20% of sales by 2040.

TotalEnergies is going to increase energy production by 30% within 2030 from the current levels, with 50% growth from electricity, essentially renewables, and the other half from LNG. The 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. Through SunPower, TotalEnergies continues to expand its presence in the North American distributed generation and storage market.

Oil Giants’ Investment in Renewable Energy

Despite the usage of energy-efficient appliances, an increase in population across the globe will undoubtedly hike the demand for electricity. The challenge for energy companies in the coming decades will be to increase electricity production without enhancing greenhouse emissions. Higher usage of electric vehicles for transportation will also create new demand for energy.

Per International Energy Agency (“IEA”) report, by 2026, global renewable electricity capacity is forecast to rise more than 60% from 2020 levels to over 4,800 GW. The IEA report predicts that renewables are set to account for 95% of the increase in global electricity capacity through 2026, with solar PV alone providing more than half.

Since there is a huge scope of growth in the renewable energy space, energy majors like BP Plc. (BP - Free Report) and Royal Dutch Shell plc , among others, are investing in the renewable energy space.

BP has adopted an aggressive energy transition strategy to capitalize on the increasing clean energy demand. In a decade, BP has set a goal of developing 50 GW of net renewable energy generating capacity, representing a massive improvement from the current capacity of 2.5 GW. BP intends to boost low carbon spending to $5 billion per annum by 2030.

Royal Dutch Shell has been on a renewable acquisition spree of late, having collaborated with IONITY, New Motion, First Utility and Silicon Ranch, as Shell attempts to diversify its portfolio beyond oil and gas. Shell's transactions with battery storage supplier sonnen and solar developer Cleantech further emphasize its increasing shift toward clean energy production.

Price Performance

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

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Zacks Rank

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

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