News

TotalEnergies SE TTE and EREN Groupe’s joint venture TE H2, along with VERBUND, Austria’s leading electricity company, have signed a Memorandum of Understanding with Republic of Tunisia to develop a large green hydrogen project named H2 Notos for export to Central Europe through pipelines.

Green hydrogen will be produced using electrolysers, powered by large onshore wind and solar projects, and supplied with desalinated sea water. The project aims to produce 200,000 tons of green hydrogen annually during its initial phase, with the potential to scale up production to one million tons per year in South Tunisia.

The project will have access to the European market through the SoutH2 Corridor, a hydrogen pipeline project connecting North Africa to Italy, Austria- and Germany, which is expected to be commissioned around 2030.

Importance of Green Hydrogen

Green hydrogen is a clean source of fuel, that is produced by splitting water into hydrogen and oxygen using renewable electricity. This green hydrogen can assist different countries to meet their decarbonization goals. The countries of Europe are also dependent on green hydrogen imports to fulfill their energy transition aspirations.

The green hydrogen production volumes in the European Union countries are expected to be much lower than demand. As a result, this new project of TotalEnergies and its partners can capitalize on the increasing demand for green hydrogen in the countries of Europe.

TotalEnergies Long-Term Plans

TotalEnergies goal is to reach net-zero emission by 2050 and has been expanding its global renewable energy portfolio through solar, wind and power storage. It will continue to expand this renewable energy generation business to reach 35 gigawatts (GW) in 2025 and more than 100 TWh of net electricity production by 2030.

The company is gradually building a portfolio of low-carbon businesses that could account for 15-20% of sales by 2040. TotalEnergies is committed to integration across the entire electricity value chain and has been investing on a regular basis to further expand its portfolio. It will integrate renewable energy and flexible power generation from natural gas and energy storage to meet its objective.

Renewable Usage on the Rise Globally

Per International Energy Agency (IEA), globally, in the next five years, 3,700 GW of new renewable capacity will come online, driven by supportive policies in more than 130 countries. Per IEA, in 2028, renewable energy sources will account for over 42% of global electricity generation.

These projections from IEA indicates a huge growth prospect for companies operating in the clean energy space. Supportive government policies, concern against emission, ongoing research and development leading to usage of new technology, development of utility-scale cost-efficient renewable projects will all contribute to achieve the target.

Clean Energy Producers to Benefit

The rising concern against emission and usage of clean energy will surely benefit the companies that are focused to generate clean energy for their customers. Companies like Constellation Energy Corporation CEG, NextEra Energy NEE and Canadian Solar CSIQ among others are going to produce clean energy and reduce emission levels.

The long-term (three-to-five years) earnings growth of Constellation Energy, NextEra Energy and Canadian Solar are currently pinned at 41%, 8% and 25%, respectively.

Constellation Energy, NextEra Energy and Canadian Solar reported average earnings surprise of 49.4%, 8.8% and 58.2%, respectively, in the last four reported quarters.

Price Performance

In the past three months, shares of TotalEnergies have risen 11.8% compared with the industry’s 7.5% growth.

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Zacks Rank

TotalEnergies currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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