Rhein on Energy and Climate

On February 10th 2012, Total, one of the three giant European oil and gas companies, has announced that it will scrap its nuclear ambitions and focus instead on gas and solar for complementing its huge and flourishing oil business.

This is good news for several reasons.

  • It will make Total`s business more sustainable by putting it on three legs and investing parts of its oil profits in sectors with a better long-term future. It will, however, take many years before the solar business will make a substantial contribution to Total`s profits. By the same token it will make the company more attractive to “green” clients, something BP had tried without delivering serious results.
  • It will strengthen Europe’s fledgling solar industry.

Thanks to the $ 1.4 billion acquisition of the US Sun Power Corporation last April Total has become the Number three in the global solar PV business. Hopefully, it will further consolidate its position by buying some of the small German solar companies that have failed to become global players. Europe desperately needs competitive solar companies to play a global role.

  • The decision by Total to enter the solar market should give a boost to the European solar industry. Its determination to become profitable in two to three years through significant cost cutting efforts will inspire more confidence.

The European Commission should applaud the overdue re-reinforcement of the European solar industry and encourage more mergers/acquisitions.

  • Hopefully, Total will also enter thermal solar power generation and make it more cost-effective through economies of scales. To that end, it should join the Desertec Industrial Initiative and help making thermal solar electricity more attractive for North Africa.
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