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TotalEnergies (TTE) Buys 50% of Clearway, Adds More Renewables

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TotalEnergies (TTE - Free Report) announced that it has entered into an agreement with Global Infrastructure Partners (GIP) to acquire 50% of Clearway Energy Group (“CEG”). This acquisition will further strengthen TTE’s position in the global renewable energy sector.

CEG is a developer of renewables projects and controls and owns 42% of the economic interest of its listed subsidiary, Clearway Energy Inc. (CWEN - Free Report) . Clearway has 7.7 gigawatts (GW) of wind and solar assets in operation through its listed subsidiary CWEN. CEG has a 25 GW pipeline of renewable and storage projects, of which 15 GW are in an advanced stage of development. Undoubtedly, this acquisition will complement nearly 12 GW renewable projects of TotalEnergies in the United States, which are currently under development.

TotalEnergies has plans to expand the clean energy generation business to reach 35 GW and 100 GW of gross production capacity from renewable sources by 2025 and 2030, respectively and this acquisition will definitely aid TTE to meet its long-term renewable target.

TotalEnergies’ Clean Energy Vision

TotalEnergies targets to achieve zero emissions by 2050 and is taking the necessary measures to attain the same. TTE is making systematic investments in operations to achieve clean energy transition goals. This new joint venture is in sync with TotalEnergies’ long-term goal to produce a substantial volume of electricity from renewable sources.

Apart from expanding operations in America, TotalEnergies is also expanding its renewable business in Asia, as the Asia Pacific region offers growth opportunities due to the increasing demand for energy. Per a report from Wood Mackenzie, the Asia Pacific region offers big opportunities for solar investment. Per the report, the total installed capacity is expected to triple to 1,500 GW in 2030 from 430 GW in 2020. TotalEnergies, to capitalize on this opportunity, has already entered into a joint venture with ENEOS to build onsite B2B solar distributed generation across Asia.

TotalEnergies is gradually building a portfolio of low-carbon businesses that could account for 15-20% of sales by 2040. In the near term, TotalEnergies plans to have more than 16 GW of renewable gross capacity in operation by the end of 2022.

Price Performance

In the past month, TotalEnergies’ shares have risen 20.9% compared with the industry’s rally of 14%.

Zacks Investment Research
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Zacks Rank & Other Key Picks

TotalEnergies currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked stocks in the same space include Equinor Inc. (EQNR - Free Report) and Murphy USA (MUSA - Free Report) , both of which currently sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Equinor’s long-term (three to five) earnings growth is currently pegged at 49.4%. EQNR delivered an average earnings surprise of 5.8% in the last four quarters. The Zacks Consensus Estimate for EQNR’s 2022 earnings has moved up 51.9% to $5.56 in the past 60 days.

Murphy USA delivered an average earnings surprise of 49.1% in the last four quarters. The Zacks Consensus Estimate for MUSA’s 2022 earnings has moved up 47.3% to $16.82 in the past 60 days.

 

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