TotalEnergys (TTE) and allies will produce green hydrogen in Tunisia

TotalEnergy SE TTE and EREN Groupe TE H2 joint venture together with VERBUND, a leading Austrian energy company, have signed a Memorandum of Understanding with the Republic of Tunisia to develop a large-scale green hydrogen project called H2 Notos for export via pipelines to Central Europe.

The green hydrogen will be produced using electrolysers, powered by large onshore wind and solar projects, and fueled by desalinated seawater. The project aims to produce 200,000 tonnes of green hydrogen per year in the initial phase, with the possibility of increasing production to one million tonnes per year in southern Tunisia.

The project will have access to the European market through the SoutH2 corridor, a hydrogen pipeline project connecting North Africa with Italy, Austria and Germany, expected to be operational around 2030.

The importance of green hydrogen

Green hydrogen is a clean fuel source that is created by splitting water into hydrogen and oxygen using renewable energy. This green hydrogen can help various countries achieve their decarbonization goals. To meet their energy transition aspirations, European countries also depend on imports of green hydrogen.

The production volume of green hydrogen in European Union countries is expected to be much lower than demand. As a result, this new project by TotalEnergys and its partners can take advantage of the growing demand for green hydrogen in European countries.

TotalEnergys long-term plans

TotalEnergys aims to achieve net zero emissions by 2050 and expand its global renewable energy portfolio to include solar, wind and energy storage. It will continue to expand its renewable energy business to reach 35 gigawatts (GW) in 2025 and over 100 TWh of net electricity production by 2030.

The company is gradually building a portfolio of low-emission businesses that could account for 15-20% of sales by 2040. TotalEnergys focuses on integration across the entire electricity value chain and regularly invests in the further development of its portfolio. To achieve its goal, it integrates renewable energy and flexible power generation from natural gas and energy storage.

The use of renewable energy sources is growing around the world

According to the International Energy Agency (IEA), 3,700 GW of new renewable capacity will come online over the next five years globally thanks to supportive policies in more than 130 countries. According to the IEA, in 2028, renewable energy sources will account for over 42% of global electricity production.

IEA forecasts point to enormous growth prospects for companies operating in the clean energy space. Supportive government policies, concern about emissions, continuous research and development leading to the use of new technologies, and the development of cost-effective utility-scale renewable projects will contribute to achieving this goal.

Benefits for clean energy producers

The growing concern about clean energy emissions and use will certainly benefit companies that focus on generating clean energy for their customers. Companies like Constellation Energy Company CEG, The energy of the next era NEE i Canadian Solar CSIQ will include, among others: produce clean energy and reduce greenhouse gas emissions.

The long-term (three to five years) earnings growth for Constellation Energy, NextEra Energy and Canadian Solar is currently 41%, 8% and 25%, respectively.

Constellation Energy, NextEra Energy and Canadian Solar posted surprising average returns of 49.4%, 8.8% and 58.2%, respectively, over the last four reported quarters.

Price performance

Over the past three months, TotalEnergys shares are up 11.8% compared with the industry’s gain of 7.5%.

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Zacks Rank

TotalEnergys is currently sporting a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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