TotalEnergies risks undermining its renewable energy strategy by creating a joint venture (JV) focused on gas-fired power with fossil fuel utility Energetický a průmyslový holding (EPH).
New research from the Institute for Energy Economics and Financial Analysis (IEEFA) warns that the JV will stand out as a heavy polluter in Europe’s power sector, even though coal capacity is not included in the deal.
The new business will have a fleet of gas plants across Italy, the UK, the Netherlands and Ireland. By taking partial ownership of these assets, IEEFA estimates that TotalEnergies will effectively double its gas-fired power emissions.
TotalEnergies and EPH plan to create a 50-50 JV with 14 gigawatts of operational and under-construction power assets. EPH will sell a 50% stake in nearly its entire flexible power generation portfolio, mostly comprising gas-fired plants, to TotalEnergies in exchange for 4.1% of TotalEnergies’ share capital.
“By doubling down on gas generation and partnering with one of Europe’s most-polluting utilities, TotalEnergies may undermine its climate transition plan and its aim of quadrupling its renewable energy capacity between 2024 and 2030,” said Jonathan Bruegel, co-author of the research and a power sector analyst at IEEFA.
“Creating the JV signals that TotalEnergies and EPH will expand or build new gas power plants. This increases the risk of carbon lock-in and the potential for stranded assets as Europe installs more renewable energy and battery storage.”
