A new report is urging major oil companies to start splashing cash on acquiring companies focused on energy storage, solar power and distributed generation.
A few years back, it became trendy for oil companies to get into renewable energy. For a while, it looked like the trend would reverse; but it may return with a vengeance due in part to depressed oil prices and the writing on the wall regarding carbon constraints.
It’s also been a big help that there have been a bunch of companies to choose from in the wind and solar sector, rather than having to set up operations from scratch.
The new targets could be next-generation battery companies – but there’s far fewer of those.
Last month, oil supermajor Total took control over battery storage firm Saft Groupe after a successful tender offer. Saft designs, develops and manufactures batteries used in the transport, industry and defense sectors.
It wasn’t Total’s first foray into renewables.
“The acquisition of Saft is part of Total’s ambition to accelerate its development in the fields of renewable energy and electricity, initiated in 2011 with the acquisition of SunPower,” said Patrick Pouyanné, Chairman and CEO of Total, when originally announcing the proposed acquisition in May.
Lux Research states other global oil “supermajors” need to heed Total’s move and explore acquisition opportunities in the battery storage sector.
“As Darwinism looms for the future of power, oil supermajors looking to evolve must choose among more expensive, broader battery players. But they should still act, as waiting longer or doing nothing, would be an even worse outcome,” states Cosmin Laslau, Lux Research Senior Analyst.
“Worthwhile battery companies continue to gain value and build momentum with each passing day, as do other opportunities toward a distributed generation future.”
Big Oil has the cash to do it – Lux says most of these companies have cash stockpiles ranging from $5 billion to $30 billion each and it names Samsung SDI, Toshiba and NEC as potential takeover targets.
However, the research firm says it’s not enough to scoop up a battery company.
“To make the most of the emerging opportunities, solar or wind is also key, as is being active in connective software and hardware.”
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