United States: TotalEnergies Awarded a 20-year Contract to Supply 1.3 GW+ of Renewable Electricity to New Jersey

Rhea-AI Summary

TotalEnergies and Corio Generation have been awarded a 20-year contract by the State of New Jersey to supply 1.34 GW of renewable electricity to over 650,000 homes. The project is a joint venture between TotalEnergies and Corio, with a guaranteed level of OREC revenue and a first-year set price of $131 per MWh. The profitability of the project is also supported by a 30% IRA tax credit, and the partners aim for commissioning in 2031. This achievement follows the provisional award of a 25-year supply contract by the State of New York to their Attentive Energy One project. TotalEnergies is expected to generate up to 10 GW of renewable power by 2025 and more than 25 GW by 2030, including a portfolio of more than 16 GW in offshore wind projects across various countries.

Positive

• TotalEnergies and Corio Generation secured a 20-year contract to supply 1.34 GW of renewable electricity to New Jersey.
• The project is expected to deliver renewable power to over 650,000 homes and provide up to $105 million in community investments across the state.
• The profitability of the project is ensured by the guaranteed level of OREC revenue, a first-year set price of $131 per MWh, and a 30% IRA tax credit.
• The partners aim for commissioning in 2031 and have a portfolio of more than 16 GW in offshore wind projects across various countries.

Negative

• None.

Insights

Energy Market Analyst

The selection of TotalEnergies and Corio Generation's joint venture, Attentive Energy Two, by the State of New Jersey to supply 1.34 GW of renewable electricity represents a significant commitment to expanding the renewable energy infrastructure. The 20-year OREC contract is a substantial agreement in the energy sector, providing a stable revenue stream for TotalEnergies and Corio. The guaranteed price of $131 per MWh, with a 3% annual inflation adjustment and the 30% IRA tax credit offer financial predictability which is crucial for long-term investment planning.

From an energy market perspective, the project's expected commissioning in 2031 aligns with the increasing demand for renewable energy sources, as states aim to meet carbon reduction targets. The community investment of up to $105 million also indicates a trend where large energy projects are expected to contribute tangibly to local economies. The impact on the stock market could be positive, as investors typically favor companies with secured long-term revenue and a clear growth trajectory in sustainable energy markets.

Financial Analyst

For stakeholders, the announcement is a testament to TotalEnergies' strategic positioning within the U.S. renewable energy market. The project's inclusion in TotalEnergies' portfolio, which is expected to generate more than 25 GW by 2030, could enhance the company's valuation due to the growing investor interest in green energy. The profitability target of 12% ROACE by 2028, mentioned by Vincent Stoquart, indicates a robust financial goal that could appeal to investors seeking companies with strong return metrics.

Additionally, the one-time inflation adjustment mechanism included in the contract mitigates financial risk associated with fluctuating construction costs, which is a significant consideration for investors concerned about the impact of inflation on project costs and profitability.

Renewable Energy Policy Expert

The Attentive Energy Two project underscores the role of policy incentives in fostering renewable energy developments. The use of OREC solicitation by the New Jersey Board of Public Utilities exemplifies state-level initiatives to incentivize renewable energy production. The awarded contract and the accompanying IRA tax credit reflect broader federal and state policy efforts to transition towards a low-carbon economy.

Long-term contracts like these can serve as models for other states and countries looking to stimulate their renewable energy sectors. The potential benefits include not only environmental improvements but also job creation and local economic development, which are critical considerations in energy policy.

NEW YORK & PARIS--(BUSINESS WIRE)-- Regulatory News:

TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) and its partner Corio Generation (Corio) announce that the State of New Jersey selected their Attentive Energy Two offshore wind project for a 20-year contract to supply 1.34 GW of renewable electricity to the state. The project will deliver renewable power to over 650,000 homes.

Attentive Energy Two, a joint venture between TotalEnergies (70%) and Corio (30%), received the award in the State’s third competitive OREC (Offshore Renewable Energy Credits) solicitation, organized by the New Jersey Board of Public Utilities (NJBPU). The development of the project is expected to provide up to $105 million in community investments across the state, and the partners are aiming for commissioning in 2031.

The profitability of the project is ensured by the guaranteed level of OREC revenue, with a first year set price of $131 per MWh after the start of commercial operations, inflated yearly by 3%, and the benefit of a 30% IRA tax credit. The contract awarded by the NJBPU also includes a one-time inflation adjustment mechanism to compensate for changes in construction costs environment until the final investment decision.

“We are honored that the State of New Jersey chose Attentive Energy Two to deliver reliable green electricity to New Jersey residents while contributing to the local economy and offshore wind supply chain. This is another success for us in the US electricity business, following the provisional award in October 2023 of a 25-year supply contract by the State of New York to our Attentive Energy One project,” said Vincent Stoquart, Senior Vice President Renewables at TotalEnergies. “Both Attentive Energy One and Two will support our operations in the attractive US power market, where we are developing a portfolio of more than 25 GW of flexible and renewable projects. They will also help us achieve our profitability target for this business segment of 12% ROACE by 2028, as well as our ambition of delivering more than 100 TWh of power generation by 2030.”

“The award of this long-term contract is a great achievement for Attentive Energy and great news for the people of New Jersey,” said Jonathan Cole, CEO of Corio Generation. “The Attentive Energy Two project will deliver clean, green energy to hundreds of thousands of New Jersey residents and stimulate billions of dollars of regional investment.”

In February 2022, TotalEnergies secured maritime lease OCS-A 0538 at the New York Bight auction. It then partnered with New York-based electricity producer Rise and global offshore wind developer Corio to join forces in the development of the Attentive Energy offshore wind projects. In addition to the Attentive Energy Two project in New Jersey, the lease’s 3 GW capacity will serve the Attentive Energy One project in New York, which was provisionally awarded a 25-year contract to supply 1.4 GW of renewable electricity to New York in October 2023. These two projects aim to provide green electricity to more than a million homes across both states.

***

TotalEnergies and electricity in the U.S
TotalEnergies is one of the top renewable energy developers in the United States, with a portfolio of large-scale solar, storage, onsite B2B solar distributed generation, onshore and offshore wind projects that are expected to generate up to 10 GW of renewable power by 2025 and more than 25 GW by 2030. The Company also recently added 1.5 GW of flexible power production capacity with the acquisition of three gas-fired power plants in Texas.

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 multi-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 energy that is ever more affordable, cleaner, more reliable and accessible to as many people as possible. Active in nearly 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.

@TotalEnergies l TotalEnergies l TotalEnergies l 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).

View source version on businesswire.com: https://www.businesswire.com/news/home/20240124983143/en/

TotalEnergies Contacts

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 capacity of the offshore wind project awarded to TotalEnergies and Corio by the State of New Jersey?

The offshore wind project has a capacity of 1.34 GW.

What is the first-year set price for the renewable electricity supplied by the project?

The first-year set price is $131 per MWh.

What is the expected commissioning year for the project?

The partners aim for commissioning in 2031.

How much renewable power is TotalEnergies expected to generate by 2025?

TotalEnergies is expected to generate up to 10 GW of renewable power by 2025.

What is the total capacity of TotalEnergies' portfolio in offshore wind projects?

TotalEnergies' portfolio in offshore wind has a total capacity of more than 16 GW.