TotalEnergies CEO says electricity is best hedge against oil and gas volatility

By America Hernandez and Yousef Saba

ABU DHABI/PARIS, Nov 3 - TotalEnergies' TTEF.PA increasing investment in electricity allows for a more predictable income stream that does not follow the boom and bust cycles of the oil and gas industry, CEO Patrick Pouyanne said on Monday.

The French oil major's strategy aims to have electricity account for 20% of sales by 2030, up from 11% last year, to capture profits on power demand, the fastest growing energy sector in coming years.

"Electricity does not follow the cycle of oil and gas, so investing in electricity in my company is giving more resilience to my business model," Pouyanne said at Abu Dhabi's annual International Petroleum Exhibition and Conference.

"When we looked at the potential of different forms of energy in terms of demand for the next 15 or 30 years, what strikes us is that in oil, growth for 20 years has been quite limited — gas has big potential but gas is more expensive.

"But fundamentally for not only AI, but for decarbonization, we need more and more electricity," he said.

He said he believed global renewables capacity would double by 2040, noting that because power supply lags the surging demand from data centres that power artificial intelligence, more capacity needed to be built to match the AI boom.

Pouyanne added that investing in renewables complemented TotalEnergies' gas business because as renewable capacity increases, so does the need for natural gas-fired plants to ensure stable supply during intermittent periods of solar and wind generation.