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Renewable energy

Total, Hanwha to set up JV for $1.8 bn US solar expansion

By Jan 15, 2021 (Gmt+09:00)

Solar farm operated by 174 Power Global, a wholly owned unit of Hanwha Energy, in Texas
Solar farm operated by 174 Power Global, a wholly owned unit of Hanwha Energy, in Texas

French refiner Total SE and South Korea’s Hanwha Energy Corp. have agreed to set up a joint venture to build solar power plants and storage centers in 12 US locations, in projects worth around 2 trillion won ($1.8 billion).

The 50:50 JV will build solar energy facilities with a combined power generation capacity of 1.6 gigawatts (GW) to provide electricity to 300,000 households annually in six US states, Total and Hanwha said in a joint statement on Jan. 14.

The projects are part of the solar development portfolio of approximately 10 GW held by Hanwha’s wholly owned US unit, 174 Power Global.

By joining hands with the energy giant, 174 Power Global expects to take advantage of Total’s financing capability to expand its territory in the US. To do so, it will transfer an additional portion of its US development pipeline to the JV.

“Starting with this joint venture, we will bolster our strategic cooperation (with Total) in the US renewable energy market,” said Hanwha Energy Chief Executive Jung In-sub.

Total first proposed the JV to Hanwha as part of efforts to bolster renewable energy business. Both companies have been running a petrochemical JV in Korea, Hanwha Total, since 2003.

“This transaction is a first significant step for Total in the US utility-scale solar market, in line with our 2025 ambition to achieve 35 GW of renewables production capacity worldwide," Julien Pouget, director of Total's renewables business, said in the statement. "I am confident that this will pave the way to more opportunities in the US renewables and storage market.”

Total's gross power generation capacity worldwide stands at around 12 GW, including close to 7 GW of renewable energy.

In the US, Hanwha provides solar energy to both retail customers and commercial and industrial facilities via its affiliates Chariot Energy in Texas and 174 Power Global Northeast.

Hanwha Energy is 100% owned by H Solutions Corp., which is jointly owned by parent group chairman Kim Seung-youn’s three sons.

In the first nine months of 2020, Hanwha Energy earned 78.1 billion won in operating profit on sales of 757.1 billion won, powered by orders for solar power plants. The January-September results beat the whole-year numbers of 2019.

Separately, Hanwha Solutions Corp. said last month it was preparing to raise 1.2 trillion won ($1.1 billion) through rights issues to shore up new growth drivers, particularly its solar energy and green hydrogen businesses.

Hanwha Solutions and H Solutions are completely separate entities, although both belong to Hanwha Group. 

Write to Kyung-min Kang at kkm1026@hankyung.com

Yeonhee Kim edited this article.

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