French Oil Major Total SA Hedges Bets With Stake in Storage
France’s Total SA became the latest oil major to hedge its bets against fossil fuels by taking a €950-million (US$1-billion) stake in another French firm, battery maker Saft Groupe SA, for well over recent valuations of the target’s stock.
The purchase allows Total, one of the world’s biggest oil companies, to accelerate its move into clean energy, Bloomberg reports. According to Total CEO Patrick Pouyanne, Saft will become Total’s “spearhead in electricity storage.”
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The energy storage market is booming, as technology prices fall and soaring renewable production opens corresponding opportunities for batteries and other storage technologies to smooth out intermittent wind and solar generation. The U.S. energy storage grew 243% last year, and is on track to hit US$2.5 billion by 2020.
“The acquisition clearly aligns with Total’s strategy to strengthen its position in the clean energy and power sector,” said Bloomberg New Energy analyst Logan Goldie-Scot. “This will give the battery manufacturer much greater clout in energy storage tenders, where scale and size of balance sheet is becoming increasingly important.”
Other oil majors have taken similar steps recently, with Royal Dutch Shell and Norway’s Statoil investing in wind, and Canada’s Suncor taking positions in both solar and wind. Taking the opposite tack, Imperial Oil, the Canadian subsidiary of U.S.-based ExxonMobil, has flatly rejected diversifying, preferring to double down on what it believes to be underpriced fossil fuel assets.