Home / Business / Total, With Energy Industry in Flux, Makes $1.7 Billion Bet on a Utility

Total, With Energy Industry in Flux, Makes $1.7 Billion Bet on a Utility

Statoil, the Norwegian giant, has increased its investments in offshore wind, gambling that enormous turbines stationed on vast floating platforms in the sea will deliver much of the world’s power. And in one of the more intriguing moves, the Italian oil company Eni said last month that it would make an initial $50 million bet on a spinout from the Massachusetts Institute of Technology that is pursuing nuclear fusion — the goal of creating clean energy by fusing atoms together.

Analysts say that while the various deals appear to be different, they are driven by similar motivations. Traditional energy behemoths are forecasting increasing demands from governments, consumers and investors that they help find solutions for climate change.

“The megatrend that renewables represent, and clean energy represents, is unstoppable,” said Valentina Kretzchmar, an analyst at the consulting firm Wood Mackenzie in London. Major oil companies, she added, “want to be part of this trend.”

Oil and gas giants had long been skeptical about whether they could make sufficient returns from green energy to satisfy investors, but that is now changing. Wood Mackenzie estimates that demand for wind and solar power will grow at an annual rate of nearly 10 percent through 2035, compared to yearly growth of just 1.5 percent for natural gas, and slight declines for oil.

Total is taking a somewhat unusual tack by not only investing in clean energy technology like solar power, but also in companies that generate, store and distribute electric power. In 2016, it bought a battery maker for €950 million.

Total aims to have more than 7 million customers in Belgium and France by 2022, and wants to become “a leading alternative supplier,” it said in a statement. In other words, it wants to challenge traditional utilities.

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News credit : Nytimes

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