TotalEnergies and EPH: A Risky Venture into Gas Power
On December 17, 2025, the Institute for Energy Economics and Financial Analysis (IEEFA) raised a flag regarding TotalEnergies’ new joint venture (JV) with the fossil fuel utility Energetický a průmyslový holding (EPH). This partnership, which is set to focus on gas-fired power, presents several risks that could undermine TotalEnergies’ ambitions for a renewable energy future.
The Nature of the Joint Venture
TotalEnergies and EPH are establishing a 50-50 JV that will encompass a portfolio of 14 gigawatts of operational and under-construction gas power assets. EPH will transfer a 50% stake in its flexible power generation portfolio to TotalEnergies in exchange for 4.1% of TotalEnergies’ share capital. This move has been criticized due to the environmental implications it carries.
Increased Emissions Concerns
One of the main worries highlighted by IEEFA is that this JV will significantly increase TotalEnergies’ gas-fired power emissions. The research suggests that, by taking a stake in these gas assets, TotalEnergies risks effectively doubling its carbon output from gas-fired power. This is particularly relevant as Europe progresses toward stricter environmental standards and aims for a greener energy sector.
Partnering with a Heavy Polluter
TotalEnergies’ decision to align with EPH—a utility known for its heavy pollution—raises questions about its climate transition strategies. Jonathan Bruegel, a co-author of the IEEFA report, emphasized that this partnership could compromise TotalEnergies’ goal of quadrupling its renewable energy capacity between 2024 and 2030. By opting for a more fossil fuel-oriented strategy, TotalEnergies risks sending mixed signals about its commitment to sustainability.
Potential for Carbon Lock-In
Bruegel noted that establishing the JV likely entails further investments in gas generation. This raises the danger of carbon lock-in, whereby TotalEnergies becomes overly reliant on gas infrastructure even as Europe intensifies its push for renewable options. Such a move could lead to stranded assets, where investments in gas infrastructure become unviable in a future dominated by renewables and energy storage systems.
Financial Rationale Behind the JV
According to IEEFA, the financial underpinnings for this JV derive from the capacity payments that gas power plants receive for being available to supply power when needed. While this model may seem financially advantageous in the short term, it misaligns with the broader trends aiming for energy transition. Capacity markets inadvertently prop up gas plants, allowing them to remain operational despite potentially being less economically viable in a fully competitive energy landscape.
Regulatory Risks Looming
As European countries move towards prioritizing emissions-free technologies—like energy storage and demand-side measures—TotalEnergies and EPH could face significant regulatory hurdles. Kevin Leung, another co-author of the IEEFA report, warned that continued reliance on capacity payments might expose the JV to regulatory risks if these markets evolve to favor cleaner options.
Governance and Transparency Challenges
The IEEFA research also underscores the necessity for robust governance mechanisms in the JV. There could be shortcomings if TotalEnergies and EPH do not transparently report the emissions and financial metrics of their gas power plants. For stakeholders to assess the JV’s alignment with EU and UK climate policies, clear disclosures regarding sustainability and financial health are essential.
Looking Ahead: Implications for TotalEnergies
This ambitious JV may offer financial advantages in the short term, but the long-term implications raise concerns. The move to partner with a gas-centric utility could jeopardize TotalEnergies’ reputation and commitment to an environmentally sustainable future. As the energy landscape continues to evolve, companies like TotalEnergies must navigate the delicate balance between profitability and environmental responsibility.
For further insights, you can read the full briefing note by IEEFA here.