TotalEnergies to acquire West Burton Energy for £450m to bolster UK energy portfolio

TotalEnergies has announced a significant expansion of its energy operations in the United Kingdom by acquiring West Burton Energy from EIG, a prominent institutional investor in the global energy sector, for an enterprise value of £450 million. This strategic acquisition includes the advanced gas-fired West Burton B power plant located in Nottinghamshire, England, which has a capacity to power approximately 1.8 million homes.

Strategic Enhancement of Energy Infrastructure

West Burton B, commissioned in 2013, is equipped with three combined-cycle gas turbines (CCGT) that collectively generate 1.3 GW of electricity. Additionally, a 49 MW battery storage system was integrated into the facility in 2018, further enhancing its efficiency and capability. This acquisition is particularly strategic for TotalEnergies as it complements the company’s existing renewable energy portfolio in the UK, which currently includes 1.1 GW of gross installed capacity and another 4.5 GW under development.

Integrating Renewable and Flexible Generation Capacities

With this acquisition, TotalEnergies aims to balance its renewable projects with flexible assets to mitigate intermittency and ensure the consistent supply of firm power. Recognizing the need for a balanced energy mix, TotalEnergies plans to divest 50% of the newly acquired assets, aligning with its assessment that it requires 700 MW of gas-based power generation capacity to support its renewable ventures effectively.

Enhancing Trading Capabilities and Market Reach

This acquisition not only strengthens TotalEnergies’ position in power generation but also enhances its trading capabilities within the UK’s electricity and gas markets. The company aims to leverage this new asset to provide affordable, available, and sustainable energy solutions to its 300,000 electricity and gas customer sites across the UK. Moreover, TotalEnergies will supply the plant by leveraging its substantial natural gas production operations within the country, where it operates 30% of the projects.

Stéphane Michel, President of Gas, Renewables, and Power at TotalEnergies, expressed enthusiasm about the acquisition: “I am delighted to welcome the West Burton B team to TotalEnergies. This acquisition contributes to our integrated strategy in the UK, which combines renewable and flexible generation capacity. It complements our 1.1 GW Seagreen offshore wind farm and allows us to accelerate the development of our Integrated Power activities in power generation, trading, and marketing in this market.”

Future Prospects and Regulatory Compliance

The transaction, which is aimed at enhancing TotalEnergies’ flexible power generation portfolio to approximately 7 GW of gross capacity, alongside 23 GW of gross renewable capacity, is subject to regulatory approval. It also aligns with the company’s financial target of achieving a return on average capital employed (ROACE) of around 12% by 2028 in this business sector.

This acquisition is a testament to TotalEnergies’ strategic vision of creating a balanced and integrated energy portfolio. By enhancing both its renewable and flexible power generation capacities, TotalEnergies is well-positioned to meet the increasing energy demands in the UK while continuing to adhere to its sustainability commitments.