The French oil firm plans to develop 3.3 gigawatts worth of solar capacity near Madrid, Spain, as part of its ambition to become the “responsible energy major”
The latest solar power deal announced by Total highlights the importance of renewables integration for oil majors as part of their energy transitions, says an analyst.
The French oil firm plans to develop 3.3 gigawatts (GW) worth of solar capacity near Madrid, Spain, having signed an agreement with Spanish developer Ignis.
The Paris-headquartered company is just one of several major petroleum companies that have scaled-up on renewables recently, as they look towards a future beyond fossil fuels.
Will Scargill, managing oil and gas analyst at data and analytics firm GlobalData, said Total’s latest solar deal comes amid a “flurry of activity” by European majors to “further its ambitions on the energy transition”.
“Total is already a leader among the oil majors in terms of active renewables capacity, mostly through solar projects,” he added.
“Linking this new capacity to the power needs of its European operations means that the deal will support its net-zero 2050 target, as well as its target for 25GW gross renewables capacity by 2025.”
Total has ramped up its clean energy ambitions despite the coronavirus pandemic
As part of its ambition to become the “responsible energy major”, Total is building a portfolio of low-carbon electricity operations, with the objective of them accounting for 40% of its sales mix by 2050.
Despite fears for oil companies around prices and demand following the impact of the coronavirus pandemic, it has so far ramped up its commitment to clean energy this year.
Currently, Total’s gross low-carbon power generation capacity is close to 9GW, of which more than 5GW comes from renewable energy sources.
As part of its latest commitment, the first solar projects are scheduled to start in 2022, with the ambition of bringing them all into production by 2025.
It will bring the companies solar portfolio under development in Spain to more than 5GW by 2025, which will position the firm as a “major player in the country’s energy transition”, as it aims to generate 70% of its electricity from renewables by 2030 and then 100% by the middle of the century.
Solar power is one of the preferred technologies among oil majors
Scargill said solar power is one of the preferred technologies among oil majors looking to grow their renewables portfolios due to its “relatively low cost and short investment cycle”.
“This deal adds to Total’s portfolio of upcoming solar capacity, which makes up the majority of the company’s renewables pipeline,” he added.
“Similarly, solar is a strategic focus for BP – the other leading oil major in terms of renewables development – through its Lightsource BP joint venture.”
The analyst believes the integration of renewables capacity with traditional oil and gas operations will be a “critical tool” as companies target net zero by 2050.
“For Total, this move to power all of its European industrial sites through solar is a significant step, as the region represents almost 70% of its global refining capacity,” he added.
“More integration is likely across the oil and gas sector, whether through development of renewables capacity at facilities or through green power purchase agreements.”