TotalEnergies advances renewable energy with €1.57bn VSB acquisition and Texas farm-down

TotalEnergies has made two significant moves to solidify its renewable energy strategy, acquiring Germany-based VSB Group for €1.57 billion while divesting 50% of its renewable energy portfolio in Texas. These initiatives reflect a targeted approach to scaling renewable energy projects globally while enhancing profitability through a capital recycling strategy.

The VSB acquisition marks a significant expansion in TotalEnergies’ onshore wind farms business in Europe, while the Texas farm-down deal aligns with its ambition to maximise returns in the US solar energy projects market.

Strengthening renewable energy projects in Europe

With the purchase of VSB Group, TotalEnergies strengthens its position as a leading renewable energy developer in Europe. VSB has a proven track record, having developed over 2 GW of onshore wind farms. Its ongoing projects include 475 MW of operational or under-construction capacity, and its future potential lies in a robust pipeline of 18 GW of renewable energy projects spanning Germany, Poland, and France.

TotalEnergies’ renewable energy strategy in Germany is gaining momentum, with the VSB acquisition complementing its recent purchases of battery storage developer Kyon Energy and energy manager Quadra Energy. The company is also a key player in Germany’s offshore wind sector, further integrating renewable energy projects into its portfolio.

This acquisition aligns with TotalEnergies’ ambition to lead Europe’s energy transition strategy. Industry analysts have highlighted VSB’s expertise in onshore wind farms as a critical asset for TotalEnergies in strengthening its position as a top-three renewable energy developer in France and a dominant player across Germany.

Optimising renewable energy portfolio in the US

In the United States, TotalEnergies has signed a deal to sell a 50% stake in its 2 GW solar energy projects and battery energy storage portfolio in Texas. The $800 million transaction with Apollo Global Management includes $550 million in equity and $250 million from shareholder loan refinancing.

The portfolio encompasses three major solar energy projects totalling 1.7 GW and two battery energy storage projects with a combined capacity of 300 MW. Despite the sale, TotalEnergies will retain operational control of these projects and continue to manage electricity production, which is already committed to third-party buyers or will be sold through TotalEnergies’ own marketing channels.

Experts view this farm-down as a strategic move within TotalEnergies’ capital recycling strategy. By optimising its renewable energy portfolio, the company is freeing up capital for reinvestment in high-growth markets while ensuring continued control over its US solar energy projects.

Expert insights: Balancing growth with profitability

Stéphane Michel, president of Gas, Renewables, and Power at TotalEnergies, underscored the significance of these transactions in advancing the company’s renewable energy strategy. He pointed to the VSB acquisition as a cornerstone of TotalEnergies’ European energy transition strategy and welcomed Apollo’s investment as an opportunity to bolster its US operations.

These initiatives, according to industry experts, reflect TotalEnergies’ commitment to balancing expansion with profitability in the competitive renewable energy projects market. By leveraging its capital recycling strategy, the company is creating opportunities for growth in both Europe and the United States.

Pioneering the energy transition strategy

Through these dual actions, TotalEnergies is enhancing its ability to deliver sustainable, clean energy solutions across the globe. The acquisition of VSB solidifies its position as a major renewable energy developer in Europe, while the Texas farm-down supports its goal of maintaining operational excellence in high-demand solar energy projects.

As the world moves towards decarbonisation, TotalEnergies’ integrated approach to renewable energy projects ensures it remains a leader in advancing the global energy transition strategy.