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Wood Mackenzie comments on Total’s stake in Adani solar unit

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Energy Global,

Speaking after Total announced it planned to buy a 50% stake in Indian company Adani Green Energy’s solar unit, Tom Heggarty, Principal Analyst with Wood Mackenzie’s Energy Transition Practice, said, “Total has been extremely active in the power and renewables M&A market as it seeks to diversify its activities and grow its exposure to the zero-carbon power sector."

“The Adani investment is the sixth it and its subsidiary companies have made in renewable power businesses so far, beginning with the acquisition of a majority stake in SunPower in 2011. Since then, it has acquired operational and development solar PV and wind assets across a wide range of countries from France, to Australia, Brazil, and Egypt”, commented Heggarty.

Wood Mackenzie states that Total already had a presence in the Indian solar PV market prior to the Adani deal through Total Eren's Eden Renewables joint venture with EDF Renewables, which has over 200 MW under the ownership and recently signed PPAs for a further 700 MW of assets.

Analyst Rishab Shrestha added, “With this partnership, Total’s solar footprint jumps by around 1 GW through 50% acquisition of 2.1 GW of Adani’s current operational portfolio in India.

“India continues to offer GW size tenders with huge individual project sizes and a market that continues to grow. The country auctioned around 11 GW of solar last year. Adani’s future pipeline remains strong with around 500 MW of solar PV under construction in India and about 200 MW operational and pipeline projects in Australia. Adani has also invested in coal mining projects that continue to face severe backlash.

“In India, payment delays from utilities to renewable IPPs and renegotiation of tariffs have worsened and made access to capital difficult. Domestic capital now comes at a premium. Adani sells more than 500 MW of solar power to TANGEDCO. The utility has had a history of delay and discounted payments and poses a risk.

“However, the government is implementing measures to reduce payment delays and curtailment issues. Adani and Total partnership boost their balance sheet and provide confidence in the execution of the contracted pipeline,” Shrestha said.

Shrestha also added that, within Asia, Total Solar’s activities in rooftop solar have thus far been concentrated in South East Asia. As Total scales up its activities in India’s solar sector, C&I rooftop could also be a growth opportunity.

Wood Mackenzie states that this investment follows a series of positive investment trends in capital deployment by investors such as ADIA, GIC, Goldman, CPPIB, Masdar, Temasek, EQT in established and new renewable development platforms.

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