Renewable Power: TotalEnergies Will Supply 1.5 TWh to STMicroelectronics in France over 15 Years

Rhea-AI Summary

STMicroelectronics (NYSE:STM) and TotalEnergies have signed a significant 15-year physical Power Purchase Agreement (PPA) to supply renewable electricity to STM's French operations. Starting January 2025, the agreement covers 1.5 TWh of total power supply from two renewable energy facilities operated by TotalEnergies, comprising wind and solar farms with 75 MW capacity.

This marks STM's first PPA in France, representing a important step toward their goal of achieving 100% renewable energy sourcing by 2027. The agreement includes structuration services to convert intermittent renewable production into constant baseload green electricity. STM has previously implemented similar PPAs in Italy and Malaysia, demonstrating their commitment to becoming carbon neutral in operations (Scope 1, 2, and partially 3) by 2027.

Positive

• Secured long-term renewable energy supply for French operations through 15-year agreement
• Agreement supports STM's goal of 100% renewable energy sourcing by 2027
• Demonstrates successful expansion of renewable energy strategy following similar agreements in Italy and Malaysia

Negative

• None.

Insights

Energy Procurement Specialist

This landmark PPA represents a strategic coup for STMicroelectronics' operational sustainability and cost management. The 15-year duration provides important long-term price stability in a volatile European energy market, effectively hedging against future energy price fluctuations and potential regulatory carbon costs. The innovative baseload structuring solution is particularly noteworthy, as it solves one of the primary challenges in renewable energy adoption - intermittency - ensuring reliable power supply for semiconductor manufacturing operations that require uninterrupted power.

The 1.5 TWh volume indicates this is a substantial portion of ST's French operations' power needs. While specific pricing details aren't disclosed, similar long-term PPAs typically offer competitive rates compared to current market prices, potentially yielding significant cost savings over the contract duration. The timing is particularly advantageous given the current European energy crisis and rising industrial power costs.

For investors, this agreement strengthens ST's ESG profile and demonstrates robust risk management:

• Reduces exposure to volatile energy markets and potential carbon pricing
• Enhances supply chain reliability through guaranteed power supply
• Accelerates progress toward 2027 carbon neutrality goals, potentially improving ESG ratings
• Shows proactive management of regulatory risks as EU tightens environmental standards

The deal's structure - combining both wind and solar with baseload conversion - represents best-in-class practice for industrial PPAs, setting a new benchmark for the semiconductor industry's green transition. This could influence similar agreements across the sector, particularly as chip manufacturers globally face pressure to decarbonize their energy-intensive operations.

Renewable Power: TotalEnergies Will Supply 1.5 TWh to STMicroelectronics in France over 15 Years

• 1^st PPA in France for STMicroelectronics, aiming at 100% renewable sourcing by 2027
  
• Power comes from 2 recent wind and solar farms of 75 MW operated by TotalEnergies

Paris, Geneva – January 28, 2025 – TotalEnergies and STMicroelectronics (NYSE:STM), a global semiconductor leader serving customers across the spectrum of electronics applications, have signed a physical¹ Power Purchase Agreement to supply renewable electricity to STMicroelectronics sites in France. This 15-year contract, started in January 2025, represents an overall volume of 1.5 TWh.

TotalEnergies will provide STMicroelectronics with the renewable power (including the guarantee of origin) produced by two recent wind and solar farms of 75 MW operated by TotalEnergies. This power comes with structuration services to transform intermittent production in a constant volume (“baseload”) of green electricity. It's the first time in France that such a 15-year contract is provided. The positive impact of the wind and solar projects on the environment and on the communities was a key success factor in the signing of the deal.

"We are delighted to sign this agreement with STMicroelectronics, which demonstrates our ability to provide long-term and innovative clean firm power solutions tailored to our customers' needs," said Sophie Chevalier, Senior Vice President Flexible Power & Integration at TotalEnergies. "TotalEnergies aims to be a preferred partner to support tech industry players towards their decarbonization efforts, and this agreement showcases our commitment and capabilities.”

“This first PPA in France marks yet another important step towards ST’s goal of becoming carbon neutral in its operations (Scope 1 and 2 emissions, and partially scope 3) by 2027, including the sourcing of 100% renewable energy by 2027,” said Geoff West, EVP and Chief Procurement Officer at STMicroelectronics. “PPAs will play a major role in our transition, and we have already signed several to support ST’s operations in Italy and Malaysia. Starting in 2025, this PPA with TotalEnergies will provide a significant level of renewable energy for ST’s operations in France, which includes R&D, design, sales and marketing and large-volume chip manufacturing.”

About STMicroelectronics
At ST, we are over 50,000 creators and makers of semiconductor technologies mastering the semiconductor supply chain with state-of-the-art manufacturing facilities. An integrated device manufacturer, we work with more than 200,000 customers and thousands of partners to design and build products, solutions, and ecosystems that address their challenges and opportunities, and the need to support a more sustainable world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-scale deployment of the Internet of Things and connectivity. We are committed to achieving our goal to become carbon neutral on scope 1 and 2 and partially scope 3 by 2027. Further information can be found at www.st.com.

TotalEnergies and electricity
As part of its ambition to get to net zero by 2050, TotalEnergies is building a world class cost-competitive portfolio combining renewables (solar, onshore and offshore wind) and flexible assets (CCGT, storage) to deliver clean firm power to its customers. By mid-2024, TotalEnergies’ gross renewable electricity generation installed capacity reached 24 GW. TotalEnergies will continue to expand this business to reach 35 GW in 2025 and more than 100 TWh of net electricity production by 2030.

About TotalEnergies
TotalEnergies is a global integrated energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our more than 100,000 employees are committed to provide as many people as possible with energy that is more reliable, more affordable and more sustainable. Active in about 120 countries, TotalEnergies places sustainability at the heart of its strategy, its projects and its operations.

For further information, please contact:

STMicroelectronics

MEDIA RELATIONS
Alexis Breton
Corporate External Communications
Tel: +33 6 59 16 79 08
alexis.breton@st.com

INVESTOR RELATIONS
Jérôme Ramel
EVP Corporate Development & Integrated External Communication
Tel: +41 22 929 59 20
jerome.ramel@st.com

TotalEnergies

MEDIA RELATIONS: +33 (0)1 47 44 46 99 l presse@totalenergies.com l @TotalEnergiesPR

INVESTOR RELATIONS: +33 (0)1 47 44 46 46 l ir@totalenergies.com

  

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¹ In the case of a “physical” Power Purchase Agreement (PPA), the renewable electricity and the associated guarantees of origin are delivered to the customer, as opposed to the “virtual” PPA, where only the guarantees of origin are delivered to the customer, and the electricity produced is sold to the grid.

Attachment

• C3307C -- Jan 28 2025 -- ST_Total PPA PR_FINAL FOR PUBLICATION

FAQ

What is the size of STM's renewable energy agreement with TotalEnergies in France?

The agreement covers 1.5 TWh of renewable power over 15 years, supplied from two 75 MW wind and solar farms operated by TotalEnergies.

When does STM's renewable power agreement with TotalEnergies begin?

The 15-year power purchase agreement began in January 2025.

What is STM's renewable energy target and timeline?

STM aims to achieve 100% renewable energy sourcing by 2027 as part of their goal to become carbon neutral in operations.

Which other countries has STM signed renewable energy agreements in?

STM has previously signed Power Purchase Agreements (PPAs) in Italy and Malaysia.

How will the renewable power be delivered to STM's French facilities?

The power will be delivered through structuration services that transform intermittent production into a constant volume (baseload) of green electricity.