TotalEnergies risks deepening its fossil fuel dependence with EPH partnership
Key Takeaways:
A planned joint venture between TotalEnergies and fossil fuel utility EPH will be a high-emission power generator.
TotalEnergies will effectively double its gas-fired power emissions by acquiring interests in gas power plants in Italy, the UK, the Netherlands and Ireland, according to IEEFA estimates.
The deal may undermine TotalEnergies’ renewable energy and climate transition plans.
TotalEnergies’ acquisition rationale is underpinned by financial benefits from capacity payments. In IEEFA’s view, this reliance reflects a distortion in energy market fundamentals and incoherence with energy transition trends.
15 December 2025 (IEEFA) | TotalEnergies risks undermining its renewable energy strategy by creating a joint venture (JV) focused on gas-fired power with fossil fuel utility Energetický a průmyslový holding (EPH).
New research from the Institute for Energy Economics and Financial Analysis (IEEFA) warns that the JV will stand out as a heavy polluter in Europe’s power sector, even though coal capacity is not included in the deal.
The new business will have a fleet of gas plants across Italy, the UK, the Netherlands and Ireland. By taking partial ownership of these assets, IEEFA estimates that TotalEnergies will effectively double its gas-fired power emissions.
TotalEnergies and EPH plan to create a 50-50 JV with 14 gigawatts of operational and under-construction power assets. EPH will sell a 50% stake in nearly its entire flexible power generation portfolio, mostly comprising gas-fired plants, to TotalEnergies in exchange for 4.1% of TotalEnergies’ share capital.
“By doubling down on gas generation and partnering with one of Europe’s most-polluting utilities, TotalEnergies may undermine its climate transition plan and its aim of quadrupling its renewable energy capacity between 2024 and 2030,” said Jonathan Bruegel, co-author of the research and a power sector analyst at IEEFA.
“Creating the JV signals that TotalEnergies and EPH will expand or build new gas power plants. This increases the risk of carbon lock-in and the potential for stranded assets as Europe installs more renewable energy and battery storage.”
Capacity market dependence
TotalEnergies’ acquisition rationale is underpinned by the financial benefits the JV’s gas power plants will receive from capacity markets. In IEEFA’s view, relying on capacity payments reflects a distortion in energy market fundamentals and incoherence with energy transition trends.
Capacity markets incentivise gas plants to play a backup role, effectively keeping such assets operational that might otherwise be financially unviable under a fully competitive, energy-only market.
“This reliance on capacity payments may expose the JV to regulatory risks if European countries change their capacity markets to prioritise emissions-free options — such as energy storage systems, demand-side measures and interconnected grids — over gas plants,” said Kevin Leung, co-author of the report and a sustainable finance analyst at IEEFA.
The research also finds that the JV could face governance shortcomings if the partners fail to report detailed financials and the substantial emissions from the business’s gas power plants.
“TotalEnergies and EPH must provide clear disclosures on financials and sustainability related to the JV’s assets to allow stakeholders to assess transition progress, in line with EU and UK climate policies,” said Leung.
Read the briefing note: https://ieefa.org/resources/totalenergies-and-eph-launch-joint-venture-centred-fossil-fuels
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