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TotalEnergies (TTE) to Develop 1.5-GW Offshore Wind in Germany

TotalEnergies SE TTE, a shareholder of Offshore Wind One GmbH, has been awarded the maritime concession N-11.2 by the German Federal Network Agency.

Concession N-11.2 (1.5 GW) is situated in the North Sea, nearly 74.6 miles (120 km) to the northwest of the German island of Heligoland. Its total size is around 60.2 square miles (156 square km). Thanks to the synergies between this new lease and the 2 GW concession N-12.1 obtained last year, TotalEnergies will be able to construct a 3.5 GW offshore wind hub in the German North Sea as a result of this success.

Under the conditions of this award, Offshore Wind One GmbH will pay the German Federal government nearly $210 (€196) million by June 2025 at the latest. This money will go toward supporting ecologically sustainable fishing practices and marine conservation. For a period of 20 years, beginning with the site's commissioning, an annual payment of $94 (€88) million will also be given to the energy transmission system operator overseeing the project's connection.

Focus on Renewable Energy

TotalEnergies' goal is to reach net-zero emissions by 2050, and it has been expanding its global renewable energy portfolio through solar, wind and power storage. The company’s portfolio in offshore wind has a total capacity of more than 16 GW, with most farms bottom-fixed.

At the end of 2023, TTE’s gross renewable electricity generation installed capacity was 22 GW. It will continue to expand this business to reach 35 GW in 2025 and more than 100 TWh of net electricity production by 2030.

Renewable Energy Generation is on the Rise

Per the U.S. Energy Information Administration (EIA), the annual share of U.S. electricity generation from renewable energy sources should be 23% and 25% in 2024 and 2025, respectively. EIA also expects that wind, among other renewable sources, should contribute 19% to U.S. electricity generation growth in 2024.

According to a Skyquest report, the global wind energy market size was valued at $87.66 billion in 2023 and is poised to grow from $95.54 billion in 2024 to $174.67 billion by 2031, improving at a CAGR of 9%.

Along with TTE, other companies like Equinor ASA EQNR, BP plc BP and ExxonMobil Corporation XOM are also set to gain from increasing renewable energy demand.

In March 2024, Equinor was awarded an offshore wind agreement from New York. Offshore wind energy is seen as foundational in transitioning to a zero-emission electric grid, and New York's commitment to the projects underscores the state’s leadership in clean energy development. EQNR is investing actively in renewable energy projects, comprising power generations from solar and wind energy. Equinor expects to boost production capacities from renewables from 4 GW to 6 GW by 2026.

EQNR’s long-term (three- to five-year) earnings growth rate is 2.17%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 3.5%.

BP has set an aggressive energy transition plan to capitalize on the mounting demand for clean energy. By 2030, it plans to reduce emissions from operations by 30-35%. BP has set an ambitious goal of developing 50 GW of net renewable energy generating capacity in a decade.

BP’s long-term earnings growth rate is 4%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 0.4%.

ExxonMobil has been working to reduce emissions by developing more efficient fuels. The company intends to make large investments 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. By 2050, it intends to achieve a net-zero ambition by electrifying operations, using lower-carbon power and upgrading equipment.

XOM’s long-term earnings growth rate is 3%. The Zacks Consensus Estimate for 2024 sales indicates a year-over-year increase of 4.8%.

Price Performance

In the past three months, shares of TotalEnergies have lost 3.7% compared with the industry’s 7.8% decline.

 

Zacks Investment Research
Zacks Investment Research


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Zacks Rank

The company 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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