TotalEnergies to Buy Stake in U.S. Wind and Solar Company in Green-Energy Push

Source: By Jenny Strasburg, Wall Street Journal • Posted: Wednesday, May 25, 2022

Deal for Clearway Energy is French oil giant’s biggest U.S. renewables acquisition

The French energy giant is acquiring the stake from Global Infrastructure Partners for $1.6 billion in cash plus an interest in a TotalEnergies unit that owns about half of U.S. residential solar business SunPower Corp. SPWR 1.13%

The Clearway deal will expand TotalEnergies’ reach in the U.S. green-power sector and comes as the world’s largest energy companies seek to transition away from oil and gas toward lower carbon power amid pressure from consumers, investors and governments.

TotalEnergies said Wednesday that Clearway is the fifth-largest U.S. renewables player, with 7.7 gigawatts of wind and solar power, and a pipeline of more than three times that volume of renewable and storage projects. The San Francisco-based company has 760 employees. TotalEnergies said the deal was its largest U.S. renewables acquisition and would bring its U.S. green-energy holdings to more than 25 gigawatts.

TotalEnergies announced the Clearway deal ahead of its annual shareholder meeting on Wednesday where it is asking investors to support its climate strategy. Energy giants including Total, BP PLC and Shell PLC have been raking in piles of cash amid high oil and gas prices, while fending off shareholder proposals asking for more-aggressive climate targets and transparency. BP and Shell so far have won shareholder support for their strategies in annual meetings this month.

The oil companies are promising investors they can balance the incentives of near-record hydrocarbon profits while also pushing further into renewable energy that will help reduce harmful greenhouse-gas emissions.

Analysts and bankers say they expect oil and gas majors to pursue more deals to support their expansions into green energy, as many would struggle to meet their stated targets through existing businesses alone.

Last year, TotalEnergies said it would pay $2.5 billion for a 25% stake in solar-energy giant Adani Green Energy Ltd., part of one of India’s largest infrastructure conglomerates.

The company also recently won offshore-wind rights in an auction to develop part of a 110,000-acre site off the Carolinas in the U.S.

The deal to buy 50% of Clearway “fits in well with TotalEnergies’ strategy to build out its renewables and electricity portfolio,” RBC Capital Markets analyst Biraj Borkhataria said in a research note, adding that it boosted the company’s exposure to the key U.S. market.

Total’s renewable-energy pipeline is the biggest among integrated-energy giants, Mr. Borkhataria said.

Write to Jenny Strasburg at jenny.strasburg@wsj.com