TotalEnergies, the French energy giant, announced that it will spend 5.1 billion euros (R$31 billion) to acquire a 50% stake in power plants mainly powered by natural gas in several European countries — the latest move by a company in the sector that returns to the previously rejected fossil fuel market.
The company, which is already a major investor in electricity, said it would use the gas plants to help balance its electricity production portfolio from renewable sources such as wind and solar farms.
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The facilities, which belong to EPH, an energy company controlled by Czech industrialist Daniel Kretinsky, are located in the United Kingdom, Italy, the Netherlands, Ireland and France.
The move appears to signal a more pragmatic approach to energy and climate change by companies — even in Europe, which has been more aggressive in pursuing environmental goals than the United States.
The world has changed since the adoption of the Paris Agreement a decade ago, with ambitious goals to combat climate change. It has become increasingly evident that the goals for reducing global greenhouse gas emissions will not be achieved — and not just because the Trump administration abandoned the agreement process.
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Energy companies have taken note. “They’ve certainly abandoned the idea that they could lead the world down that path,” said Luke Parker, vice president of corporate research at energy consultancy Wood Mackenzie, referring to the Paris Agreement.
Analysts say Europe is unlikely to copy the major energy policy changes taking place in the United States, but course adjustments are likely.
Even Germany—which has long prided itself on being a leader in renewable energy—is building gas-fired plants capable of generating 10 gigawatts, a significant amount.
Some Europeans may resent Washington’s stance against climate efforts, but the Trump administration’s approach may be influencing European governments to be more receptive to the oil and gas industry and its products.
Exxon Mobil, for example, recently signed a preliminary agreement in Athens, Greece, seen by some in the industry as a breakthrough, to explore for oil and gas in Greek waters. Trump administration officials, including Energy Secretary Chris Wright, were in attendance.
“The U.S. is proud to partner with Greece as we restore common sense and unlock affordable, reliable, and safe energy,” Wright wrote on social media.
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Policy changes matter, but the shift is also guided by practical lessons that companies, governments and societies have learned about the difficulties of transitioning from a world powered by fossil fuels to something different.
TotalEnergies has been a major developer of solar and wind energy. Over time, however, company executives concluded that just building solar and wind farms is not a very profitable business.
These facilities alone are not enough to meet the growing demand for “clean and steady” energy, as the company calls the electricity required by customers such as data centers.
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As solar and wind energy depend on sun and wind, a more stable form of electrical generation is needed — and, in many European countries, natural gas fulfills this role.
“It will be more or less a 50-50 system, between gas and renewables,” Patrick Pouyanné, CEO of TotalEnergies, told analysts, outlining the company’s future in Europe.
Pouyanné noted that the new plants would complement TotalEnergies’ position as one of Europe’s largest suppliers of liquefied natural gas — fuel chilled and transported by ships.
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Shell, Europe’s biggest energy company, has taken a tougher stance on renewables, arguing that investing in some of these technologies will not be profitable enough.
The London-based company recently said it would drop the development of two floating wind farms in British waters and a venture called Atlantic Shores in the United States. Shell said it now wants to focus on electricity trading.
Other companies are also observing the changing energy landscape. The war in Ukraine has led to a sharp reduction in natural gas supplies from Russia and a growing dependence on the United States — putting pressure on Europe to stimulate its own production, according to industry executives.
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As CEO of Energean — an oil and gas producer with operations in offshore fields in Europe — Mathios Rigas is well positioned to capture these changes in the region’s approach to energy.
Energean participated in the agreement with Exxon to drill in the waters of Greece — a country heavily dependent on imported fuels.
In Italy, where Energean has a stake in three fields, restrictions on drilling are being eased, and there are discussions about legislation to accelerate natural gas projects aimed at industry.
Rigas said Russia’s invasion of Ukraine continues to influence European governments’ views on fossil fuels.
“We went through a phase where Italy didn’t want to grant licenses,” he said. “Now I believe they are starting to change and understand that they need local production of hydrocarbons,” he said, referring to oil and gas.
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