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TotalEnergies (TTE) Signs Deal to Buy Gas Power Plants in Texas
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TotalEnergies SE (TTE - Free Report) signed an agreement with TexGen, a U.S.-based company to acquire three gas-fired power plants in Texas for $635 million with a total capacity of 1.5 gigawatt (GW). The three plants are connected to ERCOT (Electric Reliability Council of Texas), the second-largest power market in the United States.
TotalEnergies is further demonstrating its dedication to providing more readily available, reasonably priced, and sustainably produced electricity to 26 million ERCOT consumers in Texas.
Details of the Agreement
The plants include the 745-megawatt (MW) combined-cycle gas turbine (CCGT) plant at Wolf Hollow I, which is located outside of Dallas. With its 530 MW CCGT and 74 MW open-cycle gas turbine (OCGT), the Colorado Bend I plant, located south of Houston, gives additional flexibility to meet the extremely high demand, especially in summer. It also includes the 150 MW OCGT La Porte facility, which is located southeast of Houston.
These adaptable assets, which are close to Dallas and Houston, will help meet these cities' rapidly increasing energy needs while mitigating the intermittent nature of renewable power generation. Recent weather occurrences that affected Texas's ability to generate electricity from renewable resources or caused a high seasonal peak demand are in focus.
TTE’s Focus on Renewable Energy
TotalEnergies' acquisition of 1.5 GW of additional flexible production capacity will fortify its trading capabilities in the gas and power markets. This acquisition will complement TTE’s existing presence in Texas with 2 GW gross installed, 2 GW under construction and more than 3 GW under-development renewable assets.
In an effort to reach net zero emissions by 2050, the company is developing a world-class, cost-competitive portfolio that combines flexible assets like CCGT and storage with renewable energy sources like solar, onshore and offshore wind to provide clean, reliable electricity to its customers.
TotalEnergies plans to expand its power generation to more than 100 TWh by 2030, investing $4 billion per year and increasing cash flow from $2 billion in 2023 to more than $4 billion by 2028, becoming net cash-flow positive. It is gradually building a portfolio of low-carbon businesses that could account for 15-20% of sales by 2040.
Transition in Energy Space
A transition in the energy space is evident, with industries now focusing on lowering emissions and planning to use energy generated from clean sources. Per a U.S. Energy Information Administration report, renewables will contribute 22% in 2023 and 24% in 2024 for electricity generation.
Along with TotalEnergies, other oil and gas companies like ExxonMobil Corporation (XOM - Free Report) , BP plc (BP - Free Report) and Chevron Corporation (CVX - Free Report) are adopting measures to reduce emissions from operations.
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.
XOM’s long-term (three- to five-year) earnings growth rate is 3%. It delivered an average earnings surprise of 0.6% 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 Zacks Consensus Estimate for 2023 earnings is pegged at $5.33 per share.
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.
The company’s long-term earnings growth rate is 13.77%. The Zacks Consensus Estimate for 2023 earnings is pegged at $13.53 per share.
Price Performance
In the past three months, shares of TotalEnergies have risen 9.8% compared with the industry’s 4% growth.
Image: Bigstock
TotalEnergies (TTE) Signs Deal to Buy Gas Power Plants in Texas
TotalEnergies SE (TTE - Free Report) signed an agreement with TexGen, a U.S.-based company to acquire three gas-fired power plants in Texas for $635 million with a total capacity of 1.5 gigawatt (GW). The three plants are connected to ERCOT (Electric Reliability Council of Texas), the second-largest power market in the United States.
TotalEnergies is further demonstrating its dedication to providing more readily available, reasonably priced, and sustainably produced electricity to 26 million ERCOT consumers in Texas.
Details of the Agreement
The plants include the 745-megawatt (MW) combined-cycle gas turbine (CCGT) plant at Wolf Hollow I, which is located outside of Dallas. With its 530 MW CCGT and 74 MW open-cycle gas turbine (OCGT), the Colorado Bend I plant, located south of Houston, gives additional flexibility to meet the extremely high demand, especially in summer. It also includes the 150
MW OCGT La Porte facility, which is located southeast of Houston.
These adaptable assets, which are close to Dallas and Houston, will help meet these cities' rapidly increasing energy needs while mitigating the intermittent nature of renewable power generation. Recent weather occurrences that affected Texas's ability to generate electricity from renewable resources or caused a high seasonal peak demand are in focus.
TTE’s Focus on Renewable Energy
TotalEnergies' acquisition of 1.5 GW of additional flexible production capacity will fortify its trading capabilities in the gas and power markets. This acquisition will complement TTE’s existing presence in Texas with 2 GW gross installed, 2 GW under construction and more than 3 GW under-development renewable assets.
In an effort to reach net zero emissions by 2050, the company is developing a world-class, cost-competitive portfolio that combines flexible assets like CCGT and storage with renewable energy sources like solar, onshore and offshore wind to provide clean, reliable electricity to its customers.
TotalEnergies plans to expand its power generation to more than 100 TWh by 2030, investing $4 billion per year and increasing cash flow from $2 billion in 2023 to more than $4 billion by 2028, becoming net cash-flow positive. It is gradually building a portfolio of low-carbon businesses that could account for 15-20% of sales by 2040.
Transition in Energy Space
A transition in the energy space is evident, with industries now focusing on lowering emissions and planning to use energy generated from clean sources. Per a U.S. Energy Information Administration report, renewables will contribute 22% in 2023 and 24% in 2024 for electricity generation.
Along with TotalEnergies, other oil and gas companies like ExxonMobil Corporation (XOM - Free Report) , BP plc (BP - Free Report) and Chevron Corporation (CVX - Free Report) are adopting measures to reduce emissions from operations.
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.
XOM’s long-term (three- to five-year) earnings growth rate is 3%. It delivered an average earnings surprise of 0.6% 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 Zacks Consensus Estimate for 2023 earnings is pegged at $5.33 per share.
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.
The company’s long-term earnings growth rate is 13.77%. The Zacks Consensus Estimate for 2023 earnings is pegged at $13.53 per share.
Price Performance
In the past three months, shares of TotalEnergies have risen 9.8% compared with the industry’s 4% growth.
Image Source: Zacks Investment Research
Zacks Rank
TotalEnergies currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.