Blowing in the wind

6 October 2020 By George Hay Follow @gfhay

Total has joined BP in promising more investment in renewable energy. The risk is that deep-pocketed interlopers push up prices of wind farms and solar parks, eroding returns. Luckily for transitioning oil majors, the scale of new capacity needed to replace fossil fuels is vast.

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Total on Sept. 30 said it would increase its annual investments in renewable energy and electricity to over 2 billion euros between 2021 and 2025, and more than 3 billion euros from 2026 onwards.

The French energy company said its overall spending budget will remain under $12 billion in 2021, before increasing to between $13 billion and $16 billion a year between 2022 and 2025 as oil prices are expected to recover to up to $60 a barrel.

The group aims to have 35 gigawatts in gross renewable energy production capacity by 2025, up from a previous target of 25 GW, and said 70% of that was already accounted for, including projects still under construction.

It is aiming for returns of over 10% on renewable investments, to be achieved through sales of stakes in projects to third parties, known as farm downs.

UK Prime Minister Boris Johnson will on Oct. 6 reiterate a target for the UK to have 40 GW of offshore wind capacity by 2030.

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