In Short : TotalEnergies has successfully secured long-term solar Corporate Power Purchase Agreements (CPPAs) to provide a sustainable and reliable energy supply to LyondellBasell. This strategic move emphasizes a commitment to renewable energy and contributes to achieving sustainable power solutions for industrial operations.
In Detail : In a strategic move toward sustainable energy collaboration, TotalEnergies has recently announced the signing of a second long-term Corporate Power Purchase Agreement (CPPA) with LyondellBasell, a prominent player in the global chemical industry. This agreement underscores TotalEnergies’ commitment to providing competitive renewable electricity and supporting industry leaders in achieving their decarbonization goals.
The latest CPPA involves the supply of a combined 275 MWac (358 MW) of green electricity sourced from TotalEnergies’ utility-scale Cottonwood Bayou and Brazoria Solar farms in Texas. This partnership follows a precedent set at the close of 2022 when the two companies inked their initial renewable CPPA.
Under the newly signed 15-year CPPA, LyondellBasell is set to offtake 125 MWac (163 MW) from TotalEnergies’ Brazoria Solar farm. This facility, with a robust capacity of 325 MW, is strategically situated southwest of Houston, with commercial operations slated to commence by the end of 2025. Simultaneously, the 12-year CPPA signed in 2022 will see LyondellBasell offtaking 150 MWac (195 MW) from TotalEnergies’ Cottonwood Bayou Solar plant. This project, located south of Houston, boasts a capacity of 455 MW, with commercial operations expected to start by the close of 2024.
One distinctive feature of these CPPAs is their indexation on merchant prices, facilitated through an innovative upside-sharing mechanism. This mechanism ensures that both companies participate in any potential upside resulting from increased market prices throughout the contract term. TotalEnergies’ ability to structure agreements with such flexibility has been evident in prior CPPAs with industry giants like Amazon and Saint-Gobain in the United States.
Vincent Stoquart, Senior Vice President of Renewables at TotalEnergies, expressed pride in supporting LyondellBasell’s climate goals and highlighted how these agreements align with TotalEnergies’ strategy to assume merchant exposure. Stoquart emphasized that these agreements contribute to the objective of achieving profitable growth for TotalEnergies’ Integrated Power business.
LyondellBasell, in turn, sees these CPPAs as pivotal in advancing its commitment to reducing scope 1 and 2 greenhouse gas emissions. Chris Cain, LyondellBasell Senior Vice President for Net Zero Transition Strategy, underscored the critical role of power purchase agreements in meeting the company’s emission reduction targets. Cain emphasized that these agreements with TotalEnergies play a crucial role in accelerating the development of clean energy and facilitating the shift to low-carbon energy consumption at LyondellBasell’s sites.
Moreover, LyondellBasell has set a target to procure a minimum of 50% of electricity from renewable sources by 2030, based on 2020 procured levels. With approximately 15% of the company’s 2020 baseline scope 1 and 2 greenhouse gas emissions stemming from electricity consumption, the transition to renewable electricity forms a pivotal component of LyondellBasell’s pathway to achieving net-zero scope 1 and 2 emissions by 2050.
In summary, TotalEnergies’ strategic collaboration with LyondellBasell through these CPPAs not only reinforces their commitment to sustainable practices but also exemplifies the pivotal role that major corporations play in driving the global energy transition towards a greener future. As the energy landscape continues to evolve, such partnerships serve as beacons of innovation and sustainability, influencing the broader industry’s trajectory toward cleaner and more environmentally responsible practices.