French oil major bets on EV boom, with electricity retailer buyout | RenewEconomy

French oil major bets on EV boom, with electricity retailer buyout

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Oil “supermajor” Total buys French electricity retailer as part of long-term hedge against threat to oil demand from rise of electric vehicles. And did we mention the CEO totally drives an EV?

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If there was any lingering doubt that the world was shifting from fossil-fuelled internal combustion engine cars to electric vehicles, then the latest acquisition by French oil major Total SA should help put that to bed.

Total – one of the seven “Supermajor” oil companies in the world – said on Thursday that its €1.4 billion bid to acquire three-quarters of French energy retailer Direct Engie had been approved.

The company reportedly plans to make a tender offer for the rest of Direct Energie at the same price.

Total chief executive and chairman Patrick Pouyanné described the “friendly” deal as part of the group’s strategy “to expand along the entire gas-electricity value chain and to develop low-carbon energies, in line with our ambition to become the responsible energy major.”

As the Financial Times reports, the €42 a share Direct Énergie deal also continues Total’s expansion into the residential power market, “throwing down the gauntlet to incumbents like EDF.”

“It will be a game changer in the French market as they become the third player after EDF and Engie,” said Jean Trzcinski, an energy and utilities expert at Sia Partners.

A company spokesperson has reportedly said the deal would give Total slightly more than 3 million customers in France – it is targeting more than 6 million in France and more than 1 million in Belgium by 2022.

And while this is partly about securing an outlet for the company’s expanding gas portfolio, it is also about accelerating the company’s growth in the production of power from renewable sources.

Total – which last September bought French solar and wind outfit, EREN RE – aims to establish a renewable energy generation portfolio of 5GW in five years.

Direct Énergie has a portfolio of 1.35GW of combined gas and renewable generating capacity.

Finally, and perhaps most interestingly for an oil major, the FT notes that this latest in a string of power sector acquisitions by Total is also part of its “long-term hedge against the threat posed to oil demand by the rise of electric vehicles.”

As we reported here, recent German data has put the world on track to add 25 million new electric vehicles to roads a year by 2025, after a massive 55 per cent growth in EV registrations was recorded in 2017.

Even in Australia, where EV uptake has been thrown into reverse, the Australian Energy Market Operator has now doubled its forecast uptake for electric vehicles, suggesting that within two decades they could account of more than half of the nation’s car fleet – as Giles Parkinson reports today here.

Total, doubtless, still has a great deal invested in the continued use of oil for petrol-fuelled cars, but it is not blind to the shift to electric vehicles, that is closely mirroring – and deeply connected to – the global shift to renewables.

And to top it all off, Total CEO Pouyanné drives one – a fact he chose to disclose at last month’s CERAWeek oil-fest in Texas.

“I’m convinced that, in a big city, we’ll have plenty of electric cars in 10 to 15 years,” he was quoted as saying in a Bloomberg report.

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  1. Farmer Dave 2 years ago

    I certainly would not expect to see the CEOs of ExxonMobil or Chevron driving an EV! Who is going to tell Craig Kelly that the head of Total does?

    • Greg Hudson 2 years ago

      It didn’t say ‘which’ EV he drives. My guess would be a Tesla, or maybe even a French made Zoe ?

    • Alastair Leith 2 years ago

      When I saw the CEO of Chevron Australia present the Keynote at an oil and gas conference in WA he was producing so much spin against renewables and EVs you could have powered a small town from his utterances.

      He was talking about disruption and how the industry needs to keep innovating to stay ahead of the game. He used historical examples from the car market of steady as she goes, evolutionary change and disruptive change. When he came to talking about the future he never once mentioned EVs, the closest he could bring his mouth to the words was autonomous vehicles. The idea of him driving an EV let alone admitting it to the conference would have been unthinkable. He also used decades out of date costs curve projections for wind and solar LCoEs and then proceeded to say even though this is what we’re told by the pundits, it’s not true, its not going to happen like this (i.e. wind and solar being cheaper than fossil fules within 10 years) er actually they already are most places.

      • neroden 2 years ago

        Chevron is the company which used to actually lobby its stockholders to try to get them to campaign against environmental protection. They have been exceptionally evil even among oil companies for a very long time. Their corporate culture is the most obsessively “drill, burn, dump, abandon” of all the major oil companies.

        • Alastair Leith 2 years ago

          He spent 5 or 10 minutes imploring that every person in the auditorium, and also everybody in the industry put energy into defending the ‘industry’s impeccable record environmental stewardship’. It took a little self restraint not to cough out “Deepwater horizon” followed by “Montara”. Pity I didn’t record the entire thing, got some shots of his slides though.

  2. Grpfast 2 years ago

    We wouldn’t want that here. Have a history buying technology and shutting it down.

    • trackdaze 2 years ago

      Historically done in a techs infancy. Momentum and $ are with Renewables and EVs. #unstoppable!

  3. BushAxe 2 years ago

    Neoen is a subsidiary of DÉ.

  4. Robert Barnes 2 years ago

    Total has for several years also owned the ‘American’ solar panel manufacturer Sunpower (made in Asia). No sign of buying and shutting down. Still making the best solar panels available on the narket. Total seems to be seeing the light or at least keeping a foot in each camp. Coming from a fossilized oil major, this must be seen as positive. Again, the smart money is going with the inevitable transition to cheap, clean, carbon free energy with big investments like this article demonstrates.

    • neroden 2 years ago

      Total is the only oil “supermajor” with a transition plan. (Not counting DONG which already got out of oil.)

  5. MaxG 2 years ago

    A good CEO would say it like this… not: we will be going down the tubes if we stick to fossil fuels. Large corporations will sell you hair dryers if they can make the profits off them. In Germany Siemens is referred to as the largest bank with an electronics shop… as a comparison that many of the large corporations go with whatever keeps them operational.

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