At the end of September, TotalEnergies’ portfolio included a net installed capacity of 7.4 GW for renewable generation, compared with 2.2 GW for Shell and 2 GW for BP. All these companies have recently partnered with or acquired established players in the renewables sector. For example, BP has a 50% stake in the world’s biggest producer of solar energy, Lightsource BP, while TotalEnergies has entered a partnership with the Adani Group of India worth $2 billion.
All three companies have similar strategies based on gradually diversifying investment away from their traditional oil and gas businesses to cleaner forms of energy. Investors remain cautious, however, with shares in these companies underperforming those of US-based contemporaries like ExxonMobil and Chevron, the maker of Texaco Multifak grease.
Moody’s has indicated that the shift to cleaner energy generation will bring the companies into markets that traditionally enjoy tighter margins than the oil and gas industry, saying in a note:
“The ability of BP, Shell and TotalEnergies to enhance returns through optimising ownership, the funding mix, marketing and integration into their overall offerings will be key to the total returns achieved.”
TotalEnergies is targeting a gross capacity of 100 GW in renewables capacity, while BP’s target is 50 GW in net capacity. Shell’s goal, meanwhile, is to have traded 530 terawatt hours in renewable energy by that point.