TotalEnergies SE has signed an agreement to buy Shell PLC’s four-gigawatt (GW) portfolio of mostly in-the-pipeline onshore renewable energy (RE) projects in Europe.
The transaction, whose price was not disclosed, includes 500 megawatts of solar and wind in operation or under construction, mainly in Italy and the Netherlands. The 3.5-GW pipeline consists of battery storage, solar and wind projects in Italy, Spain and the United Kingdom, TotalEnergies said in a press release Monday.
“This transaction complements TotalEnergies’ power generation activities in these four key markets for the deployment of its Integrated Power strategy in Europe, in particular its European renewables asset portfolio, which amounts to nearly 10 GW of gross installed capacity or capacity under construction and 27 GW under development”, TotalEnergies said.
The parties expect to complete the transaction by yearend, subject to government approval.
Concurrently TotalEnergies penned a deal to divest a 50 percent stake in a 1.2-GW “largely developed” portfolio of onshore solar and wind projects in Europe to KKR & Co Inc. The agreement gives the assets an enterprise value of EUR 1.8 billion ($2.07 billion), a joint statement said.
TotalEnergies said in a separate statement the disposition confirms its “ability to execute partial farm-downs year after year in line with its renewables business mode”.
Generation from the assets – located in France, Germany, Poland and Spain – has already been sold to third parties or will be marketed by TotalEnergies, the joint statement said.
TotalEnergies will retain 50 percent and continue to operate the project.
The companies expect to seal the transaction this year, subject to customary conditions.
“This investment reflects our conviction in the long-term fundamentals supporting Europe’s renewable energy sector and the critical role infrastructure will continue to play in the energy transition”, said Vincent Policard, co-head of European Infrastructure at New York City-based investor KKR.
For Shell the sale of its European onshore RE business would help the company prioritize investment in “areas where it has differentiated capabilities in power, including asset-backed trading, increasing access to flexible generation capacity and customer-focused energy solutions while remaining disciplined on capital allocation and returns”, Shell said.
Last month it executed an agreement to sell Solenergi Power Private Ltd, which supplies solar and wind power to utilities in India, to Aditya Birla Renewables Ltd for $1.8 billion. The sale consists of 3.3 GW peak operating and 1.7 GWp contracted, Shell said July 13. It expects to complete this transaction by yearend, subject to closing conditions including regulatory approval.
As of the end of the second quarter Shell had 4.3-GW of RE power capacity in operation and two GW under construction or committed for sale, according to its quarterly report.