TotalEnergies Pursues Extended Nuclear Power Acquisition Agreement with EDF for Financing New Reactors

TotalEnergies SE, led by CEO Patrick Pouyanne, is ready to buy nuclear power from Electricite de France SA. They plan to do this through extended contracts. The goal is to aid the financially strained utility in funding new atomic plants.

Pouyanne is open to contracts spanning 15-20 years to meet energy demands. The now state-owned EDF commits to supplying discounted nuclear power to electricity-intensive manufacturers in response to Europe’s energy crisis. They will do this through long-term contracts and prepayments.

EDF’s Challenges Amidst State Ownership and Rival Concerns

The long-term contracts may include conditions such as curtailed supply during peak demand periods. The French government has granted EDF six months to showcase its competitive ability to supply power to energy-intensive businesses. 

Additionally, the government intends to cap the utility’s nuclear revenue in instances of high prices. This will be effective from 2026 when current regulations expire.

Concerns from rivals like Engie SA have prompted scrutiny from the energy regulator regarding EDF’s dominant position in the French power market.

Patrick Pouyanne suggests that the government could mediate between EDF and power-intensive companies. However, discussions between TotalEnergies and EDF have not yet commenced.

According to Finance Minister Bruno Le Maire, the upcoming construction of six new reactors is expected to cost over €55 billion ($60 billion).

Additionally, both Le Maire and EDF CEO Luc Remont acknowledge the imperative of government support for this program. They emphasize the increased investment needed to upgrade the power grid.

TotalEnergies’ Strategic Expansion

Recently, TotalEnergies SE took a significant step in expanding its presence in the US market. They agreed to acquire Texas’s three natural gas-fired power plants from TexGen Power LLC for $635 million.

With a joint capacity of 1.5 gigawatts, these plants are strategically positioned to meet the growing energy demand in Dallas and Houston. Moreover, they will provide a valuable solution to offset intermittent renewable power production. 

The move aligns with TotalEnergies’ strategy to diversify its energy portfolio, complementing its expanding wind and solar farms. 

This acquisition allows the French energy giant to deliver firm power to customers and capitalize on the volatility of electricity prices. TotalEnergies continues to position itself as a major player in the evolving energy landscape. They plan to invest about $4 billion annually in power generation and aim to reach 100 gigawatts of renewable power capacity globally by 2030.

The purchase of the TexGen plants, pending regulatory approvals, marks a significant addition to TotalEnergies’ recent ventures in the US clean power market. Additionally, it reinforces its commitment to sustainable and resilient energy solutions.