Total Energy chief clashes with French counterparts over Europe’s energy transition (video)

It seems that the gap between Total Energy and its French counterparts is still widening over the best way to achieve a just energy transition, in light of the Total’s president’s insistence on continuing to invest in fossil fuels, as necessary in the energy mix.

The head of Total Energy, Patrick Pouyanné, did not rule out the possibility of a gas shortage in France this winter, despite stocks being well filled, during his participation in an economic forum in France.

Pouyanné said, “With regard to gas, yes, the stocks will be full” in October, but he warned that “if the winter is cold in Europe,” the storage capacity in the old continent will not be sufficient to meet the demand of European consumers for gas. Throughout the season, according to statements seen by the specialized energy platform.

And he stressed that in the event of a harsh winter, Europe will have to control LNG shipments from other countries: “We have transferred more than 10% of the global market … We have paid a high price, we are the ones who raised prices last year.”

Patrick Pouyanné summed it up: “You’ll all have gas, you’ll have heating… As for the price, we’ll see!”

The dangers of the US presidential elections

The head of Total Energy pointed to another long-term risk, which is the decline of the United States in its domestic market, during his participation in a panel discussion on the sidelines of the Aix-en-Provence economic meetings.

In light of the presidential elections that will take place after more than a year, the American Republicans may be tempted to close the doors of liquefied gas exports, in order to limit the rise in prices in the domestic market.

“If the Republicans decide to stop exports, there are huge risks to the system,” said Patrick Pouyanné.

Today, Europe relies heavily on American gas. In 2022, the old continent alone attracted 64% of American liquefied gas exports, and flows from the United States to Europe doubled last year, and the trend continues this year, according to what was reported by the English-language newspaper “Les Echos”. French (Les Echos).

The following chart – prepared by the specialized energy platform – shows that the United States is at the forefront of LNG exporters to Europe:

The statements of the President of Total Energy contradicted the reassuring words made a few minutes ago by the head of the French company Engie, Catherine MacGregor.

She said, “Stocks are full, we are looking forward to winter quietly,” due to efforts to rationalize consumption and new sources of imports; But she stressed: “We will continue to face a very volatile system in the coming years.”

Tensions last winter also resulted from the shutdown of part of the French nuclear reactors. This prompted the head of the French Electricity Company (EDF), Luc Raymond, to confirm that “electricity production is on the rise…we can calmly approach next winter.”

Fossil fuel investment

The head of Total Energy, Patrick Pouyanné, denounced what was raised about the decline in gas prices to a normal level, which stems from adaptation to a certain price range.

He said, “For me, as a seller of gas, gas prices are somewhat high… We have moved in Europe to a price that is 3 or two and a half times higher compared to pre-crisis prices,” caused by the Russian war in Ukraine.

He added, “What drives all of our options is the cost of energy. However, the lesson from last year is that there was a price shock.”

Moreover, last winter, “it was the gas that kept the system stable. You have to keep that in mind,” says the head of Total Energy.

Pouyanné also stressed that everyone knows that the energy transition costs more: “Because of the energy transition, and because we invest less in fossil fuels, especially oil, the price of oil will always be higher.”

He also reaffirmed that Total Energy is investing billions in renewables, but will continue to produce oil.

He said: “We will continue to produce fossil fuels, because we can not force the consumer to change energy .. and if we produce less, the prices will rise.”

He continued, “Oil loses 4% of production annually if we do not invest. We were producing 100 million barrels last year, and if we did not invest, production would reach 96 million barrels. The International Energy Agency announced the need for 102 million barrels this year, so we will produce 101 million.” at least”.

Dispute over the cost of renewable energy

France’s ENGIE President Catherine MacGregor cited Spain as an example. Madrid has seen lower energy prices than France over the past 6 months, with an energy mix dominated by renewables, evidence that it is possible to achieve a “low-carbon energy mix that is cheap to the consumer.” .

Moreover, even if renewables increase instability in electricity grids, “gas power plants that run on carbon-free gas will play a huge role” in overcoming this, according to the head of Engie.

Here again, Patrick Pouyanné disagreed: “When you look at the whole system, unless you agree to keep a lot of fossil fuels, it’s going to cost more than today… You shouldn’t be telling people that since the sun is free, it’s not going to be expensive, that’s not true.” The system will be more complex to manipulate.”

He explained that this is because the electricity produced from photovoltaic panels, and that generated by wind turbines, will remain “intermittent”, that is, dependent on weather conditions.

In other words, in the energy mix where these sources will become the majority, it will be necessary to create “storage capacities” of electricity, in order to restore it when the means of production prove to be insufficient, due to lack of sunshine or wind.

However, “we are far from that,” stated Patrick Pouyanné, because no competitive technology today makes it possible to store electricity on a large scale.

Pouyanné also took the opportunity to address the circumstances under which EDF won recent offshore wind power tenders, at less than €50 per megawatt-hour, according to French-language newspaper La Tribune.

The head of Total Energy said: “If you make an investment, you probably don’t assume 50 euros per megawatt-hour, but maybe much more than that.. We’re not investing in offshore wind power in Europe for 50 euros per megawatt-hour, that’s not true.” !”.

He stressed that the allegations that renewable energy sources are unprofitable are baseless, as they will have high returns, stressing that the carbon-free energy system will be more expensive.

The head of Engie responded that they had not yet defined the components of the energy system, as there had to be flexible assets, investment in batteries had to be made, and carbon-free gas power plants had to play a role to compensate for the interruption caused by renewables.

Different visions of energy transition

By bringing together the heads of France’s big three energy companies, Total Energy, Engie and Electricité de France (EDF), the Aix-en-Provence economic meetings shed light on what separates them: different visions for environmental transformation and the future of the energy market, as captured by the energy platform. The specialist, according to the French-language “Ouest France” newspaper.

EDF and Engie at least share the goal of being completely decarbonised, and therefore oil and natural gas, by 2050, in accordance with French and European commitments, which is not the case with Total Energy.

EDF President Luc Raymond is betting entirely on electricity: “We have to look at all the technologies that enable decarbonization. Of these, carbon-free electricity has the most potential.”

“Nuclear energy is so far the only technology that allows decarbonization to be achieved on the scale of needs,” he added, at a time when French President Emmanuel Macron announced a goal of building 6 new European pressurized nuclear reactors.

For Luc Raymond, “The main challenge before us is to get back to the scale of the rapid and harmonious construction of new reactors.”

EDF welcomed the increase in the share of renewable energy sources, whether solar or wind energy; But Raymond pointed out that these energies cannot be controlled according to need, unlike nuclear energy and hydro (hydraulic) dams.

While EDF promotes nuclear energy, ENGIE offers an “electron-molecule alliance”, i.e. gas; Which is not surprising from the leader of the French gas market.

“We’re not going to do everything with electricity,” said Catherine MacGregor. “We’re going to need to keep a molecule,” especially for transportation and industry.

She added, “Today it is a fossil gas… Tomorrow we will move to biogas, biomethane (synthetic molecules that can be created with carbon-free energy, such as nuclear energy), because the molecule provides the durability needed for the energy system.”