TotalEnergies to buy German battery developer, take stakes in Danish wind

TotalEnergies is to acquire Germany battery developer Kyon Energy and expand its collaboration with Danish wind developer European Energy into the offshore wind sector, the French oil and gas company said Jan. 23.

Kyon Energy has developed 770 MW of battery storage projects, of which 120 MW are in operation, 350 MW under construction and 300 MW ready to build, in addition to a 2 GW project pipeline, it said.

"This acquisition will enable us to accelerate the development of our Integrated Power activities in Germany, both in production, trading, aggregation and marketing of low-carbon electricity available 24 hours a day," said Stephane Michel, president gas, renewables & power at TotalEnergies.

It is to buy the entire share capital of Kyon from its three founders for an upfront payment of Eur90 million ($98 million) as well as payments linked to the achievement of development targets, it said.

The acquisition would contribute to a gas and power segment target of 12% return on average capital employed by 2028, it added.

TotalEnergies will develop, build, and operate Kyon developed projects, mainly located in northern Germany.

Kyon Energy CEO Adrian Kapsalis said the partnership aims to become one of Europe's leading flexibility providers.

The Munich-based company in 2023 signed an agreement with Danish solar developer Obton to build up to 600 MW battery storage systems in Germany with estimated investments in the high three-digit million euro range over the next three years.

Recently, it secured permits(opens in a new tab) for a 116 MWh battery at Diesdorfer Wuhne near Magdeburg in Saxony-Anhalt, followed by planning approval for a 275 MWh battery at Alfeld in Lower Saxony.

Both are set to start construction this year with commissioning planned for 2025.

Offshore wind

TotalEnergies also signed a new agreement with European Energy to develop offshore wind projects in Denmark, Finland and Sweden, it said in a separate statement Jan. 23.

The agreement includes the acquisition of majority stakes in 405 MW of offshore wind under development in Denmark (85% stake in the 240-MW Jammerland Bugt and 72% stake in the 165-MW Lillebaelt South).

Both sites are included in the nine open-door projects(opens in a new tab) that were confirmed by the Danish Energy Agency in December 2023 and have obtained grid connection permits.

The final construction permits are expected in mid-2024 with startup planned by 2030.

Electricity generated by these projects will be sold through corporate power purchase agreements (CPPAs), it said.

In addition, TotalEnergies and European Energy also intend to jointly develop new large-scale offshore wind projects in Sweden and Finland and bid in the upcoming offshore wind tenders in Denmark.

TotalEnergies will contribute its experience in large-scale projects and its ability to market the offtake in merchant markets, it said.

"These new offshore wind projects in Denmark are aligned with our strategy of developing renewable projects in merchant countries at competitive cost," said Vincent Stoquart, Senior Vice President, Renewables at TotalEnergies.

Last year, the oil and gas major was awarded concessions for 3 GW offshore wind in Germany and also bought the renewable energy aggregator Quadra Energy, which had a "virtual power plant" with 9 GW of connected assets.

TotalEnergies plans to expand its gross renewable electricity generation capacity from 22 GW installed by end-2023 to 35 GW in 2025 and produce over 100 TWh of net electricity in 2030.

Analysts at S&P Global Commodity Insights forecast installed battery capacity(opens in a new tab) in Western Europe will rise from around 7 GW at the start of 2023 to 19 GW in 2025.

Volume-weighted capture prices for German offshore wind in 2023 fell 71% year on year to Eur86.28/MWh, according to Platts assessments for S&P Global Commodity Insights.