New analysis from Westwood Global Energy Group has revealed that Total (NYSE: TOT) will outpace clean energy majors Iberdrola (OTCMKTS: IBDRY) and Ørsted on renewable power capacity by 2030.
The report highlights Total’s ambition to reach 100 gigawatts (GW) of renewable power capacity over the next two decades, which Westwood highlighted is an aim only eclipsed only by Enel’s target of 145 GW. Iberdrola is said to have set a target of 95 GW and Ørsted a target of 30 GW.
In order to meet its target, Total has already invested $8 billion in renewables and power between 2016 and 2020, with a significant focus on solar PV, Westwood noted. In addition to Total, Westwood’s research reviewed the portfolios of BP, Shell, Repsol, Eni, and Equinor alongside Iberdrola, Enel, NextEra Energy, and Ørsted.
“Total has set a course to diversify its portfolio, reflected by its proposed name change to Total Energies last week,” David Linden, the head of energy transition at Westwood, said in a company statement.
“It’s leading the way – Total’s targets are double that of peers like BP at 50 GW. However, in energy terms renewables will still be the minority in Total’s entire portfolio,” he added.
“In future, the combined scale of ambition of both clean energy and oil and gas supermajors, together with their focus on onshore wind and solar, could see them compete in high growth markets. Collaboration will be an increasingly important part of the modus operandi as technologies, markets and companies converge, especially in green hydrogen where the boundaries are more blurred,” Linden went on to say.
Arindam Das, the head of consulting at Westwood, said, “it’s not yet clear how the growing renewables portfolio of oil and gas companies will be valued by the investment community”.
“In the next decade oil companies are still expected to be underpinned by sizable fossil fuel businesses. Can the renewables portion of their portfolio become of material scale to deliver stable, low risk returns that investors will accept? Or do investors still expect higher risk, higher returns? The answer to these questions will have a great bearing on the energy transition and the oil and gas majors’ role in it,” he added.
Westwood is a specialist energy market research and consultancy firm, which began life back in 1990. The business has several offices around the globe, including in Houston, London and Singapore.
To contact the author, email andreas.exarheas@rigzone.com
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