TotalEnergies has announced its agreement to acquire German renewable energy developer VSB Group for €1.57 billion ($1.65 billion).
This acquisition, purchased from Swiss asset manager Partners Group, underscores TotalEnergies’ commitment to accelerating its growth in Germany, a priority market for its integrated power business.
Stéphane Michel, TotalEnergies’ President of Gas, Renewables, and Power, highlighted the strategic importance of this acquisition.
“In line with our strategy, these transactions will enable us to optimize our capital allocation in renewables and improve the profitability of our Integrated Power business.
“We welcome the 500 employees of VSB Group and their leading onshore wind expertise in European markets.”
Stéphane Michel, TotalEnergies’ President of Gas, Renewables, and Power
Germany, Europe’s largest economy and a renewable energy leader, has been identified by TotalEnergies as a crucial market for its energy transition strategy.
By acquiring VSB Group, TotalEnergies gains a significant foothold in onshore wind energy and access to a robust renewable energy pipeline.
VSB boasts over 30 years of experience in the renewable energy sector, with a portfolio spanning more than 2 GW of developed capacity, and a pipeline of 18 GW of wind, solar, and battery storage technologies concentrated in Germany, France, and Poland.
VSB’s current operations include 475 MW of renewable energy capacity under construction or in operation, predominantly in Germany and France.
“Their competencies and assets will contribute to the development of our Integrated Power strategy in Europe, notably in Germany,” Michel noted.
TotalEnergies plans to leverage this expertise alongside its existing renewable infrastructure, including recently acquired battery storage developer Kyon Energy and energy manager Quadra Energy.
The acquisition will also complement TotalEnergies’ significant offshore wind projects in northern Germany, further strengthening its Integrated Power business in the region.
With Germany accounting for half of VSB’s portfolio, the deal is poised to enhance TotalEnergies’ ability to deliver clean and firm power to customers across Europe. In France, the acquisition will bolster the company’s position as a top-three renewable energy player.
Investment in Texas Solar and Battery Storage Projects
In addition to its European expansion, TotalEnergies is making significant strides in North America. The company has agreed to sell a 50% stake in a 2 GW portfolio of solar and battery energy storage system (BESS) projects in Texas to Apollo Global Management.
TotalEnergies noted that the deal will inject $800 million in cash into TotalEnergies, comprising $550 million in equity from Apollo and $250 million in shareholder loan refinancing.
The Texas portfolio includes three solar projects with a combined capacity of 1.7 GW and two BESS projects with a capacity of 300 MW. TotalEnergies will maintain a 50% operational stake in these projects, which have either already secured electricity off-take agreements or will be commercialized in the future.
Michel further emphasized the significance of the transaction, stating “We are looking forward to joining forces with Apollo as a partner in our renewable assets in Texas.”
TotalEnergies has set a 12% profitability target for its Integrated Power business, which blends renewable energy sources such as solar, onshore wind, and offshore wind with flexible assets like natural gas-fired power plants and battery storage.
To achieve this goal, the company plans to sell up to 50% stakes in its renewable assets once they reach commercial operation dates (COD) and are de-risked. This strategy allows TotalEnergies to maximize asset value, optimize capital allocation, and manage investment risks.
By the end of 2024, TotalEnergies’ renewable electricity generation capacity surpassed 24 GW. The company aims to expand this capacity to 35 GW by 2025 and achieve over 100 TWh of net electricity production by 2030.
The acquisition of VSB Group aligns with TotalEnergies’ broader strategy of becoming a leading global player in renewable energy.
It comes as the company seeks to diversify beyond its traditional oil and gas operations and align its activities with global energy transition goals.
VSB’s extensive pipeline of projects, particularly in Germany and Poland, positions TotalEnergies to capitalize on favorable policy environments and growing demand for renewable energy in Europe.
Germany’s ambitious renewable energy targets, including plans to produce 80% of its electricity from renewables by 2030, make it a fertile ground for investment.
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