Insight
How renewable power can transform TotalEnergies' cash flow
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
TotalEnergies is building a differentiated hedge in renewable power. By the mid-2040s, operating cash flow from wind and solar could surpass 50% of the pre-pandemic levels of upstream cash flow. The increasing proportion of operating cash flow coming from renewables is a real strength in future oil and gas down cycles. Value destruction is a risk from going so long in wind and solar. But renewable power returns are less volatile than upstream, especially in a downcycle. TotalEnergies has also led peers in upstream business development over the last five years to create one of the strongest E&P portfolios in the peer group. Successful execution will add even more commodity, segmental, thematic, and geographical diversity. This dual growth strategy brings unique flexibility to manage risk and uncertainty. TotalEnergies is keeping its options open in both old and new energies. We expect more players to embrace elements of its strategy as they respond to the energy trilemma.
Table of contents
- Executive Summary
- Sticking with an ambitious growth strategy
- Managing the free cash flow challenge in building out wind and solar
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Strategic options to respond to shifting risks and rewards
- Extend the upstream plateau
- Switching on renewable power free cash flow generation
- Flip wind and solar assets before construction starts
- Expanding low-emissions fuels
- Implications for TotalEnergies’ peers
- Striking the right tempo in moving from old to new energy
Tables and charts
This report includes the following images and tables:
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CoRSI sustainability scores: 2022 versus 2023Net renewable power capacity growth targets/ambitions*Estimate of TotalEnergies' projected energy production mix under its vision of a Net Zero company in 2050*
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Wood Mackenzie’s estimate of TotalEnergies’ renewable power cash outflows and inflowsWood Mackenzie’s estimate of TotalEnergies’ free cash flow (real terms)*Wood Mackenzie’s estimate of TotalEnergies’ operating cash flow (real terms)*US tight oil free cash flow for US Tight Oil Inc* – can TotalEnergies replicate this in renewable power?
What's included
This report contains:
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