TotalEnergies to acquire 50% of EPH power plants in Western Europe for $5.9 bil

TotalEnergies has signed an agreement with Czech energy group EPH for the acquisition of 50% of its flexible power generation platform in Western Europe for Eur5.1 billion ($5.9 billion), the French energy major said Nov. 17.

The all-shares transaction to create a 50-50 joint venture covers over 14 GW of flexible generation assets in operation or under construction, representing an annual production of 15 TWh, rising by a third to 20 TWh (pro-rata) in 2030, it said.

"This transaction is founded on our strong appreciation of TotalEnergies, its management team led by Patrick Pouyanne and its strategy. For all these reasons, we are both highly interested in becoming a long-term anchor shareholder of TotalEnergies and excited to create a joint venture which is already today a leading player in European flexible power generation," said EPH chairman Daniel Kretinsky.

Under the agreement, EPH will receive the equivalent of Eur5.1 billion in TotalEnergies shares with the Paris-based company issuing 95.4 million new shares at Eur53.94/share.

This represents approximately 4.1% of TotalEnergies' share capital and will make EPH one of its largest shareholders upon completion of the transaction, expected in mid-2026, pending a consultation process with the relevant employee representatives and the approval of the competent authorities.

'Most profitable European electricity markets'

Prague-based EPH has built up a portfolio of gas-fired and biomass power plants across Italy, the UK and Ireland, the Netherlands and France, with a pipeline of 5 GW under development, including battery projects:

• Italy: 7.5 GW, with 3.7 GW in operation, 2.4 GW under construction, including two next-generation gas-fired power plants that are among the most efficient in Europe, and 1.4 GW under development.
• UK and Ireland: 7.1 GW, including 5 GW from operating gas and biomass plants, 0.4 GW of batteries under construction and 1.7 GW under development.
• Netherlands: 3.6 GW, with 2.6 GW from gas-fired plants that are particularly well located to meet the needs of the German market, 0.2 GW from batteries under construction and 0.8 GW under development.
• France: 1.1 GW, with 100 MW of batteries under construction and 1 GW under development.

The transaction is consistent with TotalEnergies' Integrated Power strategy and will strengthen its position in the "most profitable European electricity markets," it said. It will allow TotalEnergies to expand its power trading activities and develop its Clean Firm Power offering to its customers.

This will position the company as a key player to meet Europe's growing data center demand, it added.

In a call with analysts, TotalEnergies' head of gas, renewables and power Stephane Michel added that the portfolio was mainly based on relatively modern gas-fired plants (10.8 GW in operation, 1.7 GW under construction and 3.2 GW under development).

Some 0.5 GW was biomass-fired with another 0.3 GW under construction. In batteries, some 1.3 GW was under construction and another 1.6 GW under development, mainly in Italy and the UK.

EPH: Selected Operating Power Plants

Source: EPH (selection by Platts)

'Hedge on LNG in Europe'

Furthermore, leveraging TotalEnergies' strong position in supplying LNG to Europe, this transaction enhances its ability to diversify value creation along the gas value chain, particularly between the US and Europe.

The additional net electricity production from the transaction, estimated at 15 TWh/year, will enable TotalEnergies to capture added value to approximately 2 million mt/year of LNG, it said.

As a result of this transaction and due to this accelerated inorganic growth, TotalEnergies is lowering its annual net capex guidance by $1 billion/year to $14 billion-$16 billion/year for 2026-2030, of which $2 billion-$3 billion is for Integrated Power.

TotalEnergies maintains its 2030 electricity generation target of 100-120 TWh.

Given Total Energies' position as the 'Number 1 gas supplier' in Europe, the transaction enables it to capitalize on gas-to-power integration and create added value for our LNG chain, it said.

"We are convinced that this partnership will create lasting value for our shareholders and are also pleased to welcome a new long-term European shareholder who is fully committed to TotalEnergies' transition strategy," said Patrick Pouyanne, Chairman and CEO of TotalEnergies.

Pouyanne described the JV as "operated as a tolling scheme, where we bring the LNG and maximize the output together."

This would form an "LNG hedge in Europe," the CEO said, adding that this would also have benefits for EPH.

According to Pouyanne, EPH owner Kretinsky requested the transaction in shares, which is intended as diversification for EPH, which still relies heavily on coal assets, especially in Europe's biggest power market Germany.

In the call, Pouyanne referred to a gap remaining for its German gas plans, with the company working on that, noting a difficult market for such deals ahead of the planned tenders for new gas-fired power plants by the German government.

Platts, part of S&P Global Energy, assessed European LNG (NWE DES) at $10.035/MMBtu, while UK power for 2026 delivery was assessed at GBP76.09/MWh ($100.30/MWh) on Nov. 14.