TotalEnergies (TTE) and Adani Green Ink JV to finance 1.1 GWac project

Total Energies TTE recently announced that it has signed a new clean energy joint venture (JV) with Adani Green Energy Limited (“AGEL”). Under this agreement, TotalEnergies will invest $300 million and hold a 50% stake in the new JV, with AGEL holding the rest.

The JV will have an electricity portfolio of 1,050 megawatts (MWac) – 300 MW of operating capacity, 500 MWac of projects under construction and 250 MWac of assets under development, including solar and wind.

TTE’s focus on clean energy

TotalEnergies, which aims to achieve net zero emissions by 2050, had gross installed renewable energy capacity of 19 gigawatts (GW) as of July 2023. The company plans to expand to 35 GW of gross renewable and storage capacity by 2025 and 100 GW by 2030.

In particular, its recent developments in the renewable energy sector include a plan to build a new mechanical recycling plant for plastic waste at a facility in Grandpuits, southeast of Paris, and a partnership with European Energy to build and operate a 65/35 joint venture with a capacity of at least 4 GW onshore renewable energy projects in multiple regions.

As all industries rapidly adopt renewables as their energy source of choice, TotalEnergy’s efforts to expand its renewable portfolio, including its latest joint venture with AGEL, are expected to strengthen its position in the growing renewables market.

TTE Prospects in India

While China and the United States continue to be forerunners in the global renewable space, India holds a significant position in terms of emerging countries’ contribution to promoting clean energy. Impressively, India is one of the largest emerging economies, offering high growth prospects in renewable energy generation.

According to a report by the India Brand Equity Foundation, as of May 30, 2023, India had a fully renewable energy capacity of 168.9 GW, including 67.82 GW of solar and 43.20 GW of wind. The country aims to achieve about 450 GW of installed renewable energy capacity by 2030, with over 60% expected to come from solar.

TotalEnergys is actively working to expand its presence in the Indian renewable energy market. The recent announcement will enable it to accelerate its growth in the country.

Besides, TotalEnergys already holds a 19.7% stake in AGEL. The company also has a joint venture with AGEL called Adani Green Energy Twenty Three Limited (AGE23L) which has a portfolio of 2,353 MW.

Price performance

Over the past year, TTE shares are up 38.3%, while the industry as a whole has grown 25.7%.

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Zacks Rank and Key Picks

TotalEnergys currently has a Zacks Rank #3 (Hold).

Some companies in the same sector have a better position in the rankings Constellation Energy Corp. CEG- Archrock Inc. AROC i Texas Pacific Land Corp. TPL. CEG currently has a Zacks Rank #1 (Strong Buy), while AROC and TPL currently have a Zacks Rank #2 (Buy). You can see complete list of today’s Zacks #1 ranked stocks here.

Constellation Energy’s long-term earnings growth rate is estimated at 23.3%. The Zacks Consensus Estimate for 2023 earnings per share (EPS) has increased 26.9% over the past 60 days.

Archrock’s long-term (three-five year) earnings growth rate is estimated at 7%. The Zacks Consensus Estimate for 2023 sales indicates a 16.6% improvement over reported 2022 sales.

The Zacks Consensus EPS estimate for Texas Pacific Land’s 2023 EPS has moved 0.6% higher over the past 60 days. The stock boasts a surprising four-quarter average gain of 1.25%.

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