Germany: TotalEnergies Wins Further Maritime Lease in the North Sea to Develop 1.5 GW of Offshore Wind

Rhea-AI Summary

TotalEnergies (Paris:TTE) has been awarded a maritime lease by the German Federal Network Agency to develop a 1.5 GW offshore wind project in the North Sea.

Located 120 km northwest of Heligoland, this concession, N-11.2, will cover 156 square kilometers, enabling TotalEnergies to establish a 3.5 GW offshore wind hub in the region.

The company will pay €196 million to the German Federal government by June 2025 and an annual €88 million contribution for 20 years to the electricity transmission system operator from the project's commissioning.

This concession has a 25-year term, extendable to 35 years. This development supports TotalEnergies' goal to net-zero by 2050, expanding its renewable capacity to 35 GW by 2025.

Positive

• Award of 1.5 GW offshore wind concession in North Sea.
• Establishment of 3.5 GW offshore wind hub in German North Sea.
• TotalEnergies' renewable electricity capacity expected to reach 35 GW by 2025.
• Support for Germany's decarbonization targets.
• Extended concession term up to 35 years.

Negative

• Obligation to pay €196 million to German Federal government by June 2025.
• Annual contribution of €88 million for 20 years.

Insights

Financial Analyst

TotalEnergies securing a new maritime lease for a 1.5 GW offshore wind project in the North Sea is a significant development in its renewable energy portfolio. This strategic move aligns with the company’s commitment to achieving net-zero emissions by 2050. The financial implications are notable; a one-time payment of €196 million and an annual fee of €88 million for the next 20 years will be substantial costs for the firm. However, these investments are expected to yield long-term benefits through synergies and increased capacity, strengthening TotalEnergies’ position in the renewable energy market.

The financial burden from these payments should be weighed against the potential revenue from the generated electricity and the enhanced market position. The extension of the concession term to 35 years offers a longer horizon for cost amortization and profitability. Additionally, the acquisition could enhance TotalEnergies' stock attractiveness to environmentally conscious investors.

Energy Market Analyst

TotalEnergies' expansion in the offshore wind sector marks a important step towards meeting Germany’s decarbonization goals. Offshore wind farms like these are essential to reducing reliance on fossil fuels. The integration of this new lease with the previously won 2 GW concession is a strategic advantage, potentially reducing operational costs through shared infrastructure and logistics. By contributing to marine conservation and promoting eco-friendly fishing, TotalEnergies also strengthens its corporate social responsibility profile.

In the short-term, the company might face operational challenges and considerable initial outlays. Yet, the long-term outlook is promising given the growing demand for renewable energy. Investors should consider the stability and profitability of such projects, especially in a market that is increasingly valuing sustainable practices.

Environmental Policy Expert

The environmental commitments accompanying this offshore wind project are noteworthy. TotalEnergies’ agreement to allocate €196 million towards marine conservation and eco-friendly fishing practices is a positive step. This not only meets regulatory requirements but also enhances the company’s reputation as a responsible and sustainable entity.

The synergy between the new 1.5 GW project and the existing 2 GW concession signifies a strategic approach to maximizing efficiency and minimizing environmental impact. However, investors should monitor the company’s adherence to these commitments and the actual environmental benefits achieved, as these could affect public perception and regulatory approvals for future projects.

PARIS--(BUSINESS WIRE)-- Regulatory News:

TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE), as shareholder of Offshore Wind One GmbH, has been awarded the maritime concession N-11.2 by the German Federal Network Agency, following auctions held in Germany.

Located in the North Sea, around 120 kilometers north-west of the German island of Heligoland, concession N-11.2 (1.5 GW) covers an area of around 156 square kilometers. This success will enable TotalEnergies to build a 3.5 GW offshore wind hub in German North Sea, taking benefit of the synergies between this new lease and the 2 GW concession N-12.1 won last year.

Under the terms of this award, Offshore Wind One GmbH will pay, at the latest in June 2025, the German Federal government €196 million, which will be allocated to marine conservation and the promotion of environmentally friendly fishing. An annual contribution of €88 million will also be paid to the electricity transmission system operator in charge of connecting the project, for a term of twenty years starting from the commissioning of the site.

The concession will run for a term of 25 years, extendable to 35 years.

“Building upon the successful award of concession N-12.1 in the German North Sea last year, the award of the N-11.2 site will enable TotalEnergies to establish a 3.5 GW offshore wind energy hub, building on the quality of both sites and taking advantage of the development and operational synergies between them. This marks a new step for the deployment of TotalEnergies Integrated Power strategy in Germany after the acquisition of Quadra Energy, one of the top 3 aggregators of renewable electricity production and of Kyon Energy, a prominent developer of battery storage solutions. TotalEnergies is also very pleased to contribute to Germany’s decarbonisation targets,” said Stéphane Michel, President Gas Renewable and Power of TotalEnergies.

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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. At the end of 2023, TotalEnergies’ gross renewable electricity generation installed capacity was 22 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.

TotalEnergies and offshore wind
TotalEnergies’ portfolio in offshore wind has a total capacity of more than 16 GW, with most farms bottom-fixed. These projects are located in the United Kingdom (Seagreen, Outer Dowsing, West of Orkney, Erebus), South Korea (Bada), Taiwan (Yunlin, Haiding 2), France (Eolmed), the United States (Attentive Energy and Carolina Long Bay), and Germany (N-12.1 and 0-2.2).

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.

@TotalEnergies - TotalEnergies - TotalEnergies - TotalEnergies

Cautionary Note
The terms “TotalEnergies”, “TotalEnergies company” or “Company” in this document are used to designate TotalEnergies SE and the consolidated entities that are directly or indirectly controlled by TotalEnergies SE. Likewise, the words “we”, “us” and “our” may also be used to refer to these entities or to their employees. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate legal entities. This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. Information concerning risk factors, that may affect TotalEnergies’ financial results or activities is provided in the most recent Universal Registration Document, the French-language version of which is filed by TotalEnergies SE with the French securities regulator Autorité des Marchés Financiers (AMF), and in the Form 20-F filed with the United States Securities and Exchange Commission (SEC).

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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

Source: TOTALENERGIES SE

FAQ

What is the latest maritime concession awarded to TotalEnergies in Germany?

TotalEnergies has been awarded the N-11.2 maritime concession in the North Sea to develop a 1.5 GW offshore wind project.

Where is the new TotalEnergies offshore wind project located?

The new project is located around 120 kilometers northwest of Heligoland in the North Sea.

How much will TotalEnergies pay the German Federal government for the new concession?

TotalEnergies will pay €196 million to the German Federal government for the N-11.2 concession by June 2025.

What is the annual financial commitment of TotalEnergies for the new offshore wind project?

TotalEnergies will pay an annual €88 million contribution to the electricity transmission system operator for 20 years.

How long is the term for TotalEnergies' new offshore wind concession in the North Sea?

The concession term is 25 years, extendable to 35 years.

What is the combined capacity of TotalEnergies' offshore wind hub in the German North Sea?

The combined capacity will be 3.5 GW, including the new 1.5 GW concession and the 2 GW concession won last year.