After black gold, Total will now launch to a new seam, the market for distribution of natural gas and electricity to individuals. “Pump the jack”, Total made the big difference but the oil does not really invite by chance in the individuals. Because, as recalled by the CEO of Total, Patrick Pouyanné, the 21st century will be electric. “We will pay it”,-he said Thursday on the occasion of the launch of Total Spring, a supply of natural gas and green electricity to individuals which is 10% less expensive compared to regulated tariffs.
Total “has the ambition (to) to convince enough quickly three millions” of customers, said Patrick Pouyanné, promising “not to wait five years” to reach this figure. Total, which will provide electricity from 100% renewable energy, having “become the largest alternative operator in France”, stressed the CEO, without detailing its respective objectives in the gas and electricity.
The bid Total shall be warranted for at least a year and, according to the evolution of the markets, the oil ensures that its supply will always be less expensive by at least 5%, says one to The Tribune. “It is still, for a family with two children, which is heated with electricity, a saving of more than € 200 per year, for a young person who is in a studio, more than 50 euros per year”, explained Patrick Pouyanné on RTL. The oil account to be seduced by competitive prices, the quality of its offer to the image of its service stations where a million of French stops each day, and, finally, by the simplicity of its offer.
Total assumes his role of outsider
By entering under its own brand on the French market of individuals, Total pursues its strategy of integration in the downstream of the chain gas and electricity in Europe. The oil does not land unexpectedly in individuals. “We already have this link” with them and “we want to deepen it,” said Patrick Pouyanné. On this market, Total has already more than 400,000 customers in France and 700,000 in Belgium under the belgian brand Lampiris, which was bought a year ago. After France, Total look at the netherlands and Germany. The oil is also a major player on the market of professionals with more than 500,000 powered sites in six european countries (United Kingdom, France, Belgium, the netherlands, Germany and Spain).
So far, the market for the supply of gas and electricity to French households, which is open to competition since 2007, is still dominated by EDF and Engie. In electricity, EDF continues to distribute the current to the regulated tariffs on almost 84% of the households. The 5.2 million homes that opted for an offer to free price, are almost all gone with one of its competitors. In gas, the market is a little more open, with more than half of the 10.6 million households to the gas that had left the regulated tariffs offered by Engie. Among them, the ex-GDF Suez has been able to maintain 2.8 million customers via its own offerings to market. It retains a market share of 75%.
Sign of the power of the two incumbent operators, in the electricity, the main competitor of EDF is to become … Engie, which provides electricity to 3.3 million customers, a little over 10% market share. And in the gas, EDF, with 1.3 million customers, is now number 2 in the industry behind Engie, also with approximately 10% market share. What are the goals of Total, which will provide 10 gigawatt (5 from renewable energy sources and 5 from natural gas, a market in which it is among the top three worldwide) to serve the three million target customers.
No area on the alternative operators
If Patrick Pouyanné acknowledges that it will not be able to compete with the former monopolies on the use of their land – EDF in the electricity and Engie in the gas -, Total wants “to be the biggest alternative operators,” according to the CEO of Total, and compete with the Direct Energy and the Italian Eni, the main competitors of the incumbent operators in France. “After ten years of existence of the market”, the low share of distributors alternative “is amazing,” said Tom Van de Cruys, ceo of Lampiris, which will also continue to manage its operations under its name in Belgium. “It is a purchasing power immense, which is wasted”.
This is not for lack of offers as a thirty providers compete in each of the energies. At the end of September, Butagaz, specialist bottled gas propane and butane, has announced an offer of distribution in the gas as electricity. Only a handful among the new players was able to pull their pin of the game. In electricity, only Direct Energy, present in France for 14 years, holds 1.4 million subscribers. A little over 4% market share of individuals. It is on the third step of the podium. The group has also diversified in the production in recent years, is also the fourth supplier of gas to individuals with 497.000 customers. It follows the Italian Eni, the French subsidiary serves more of over 630,000 households. The group was attacked by 2017 the electricity market, and aims the 140,000 customers as of the end of the year.
Investments
To achieve its objectives, Total plans to expand its production capacity in France and did not buy or build natural gas power plants, or even to be a candidate in a hydroelectric concessions. But Patrick Pouyanné has remained very vague on the investment plan to develop this new activity. He simply recalled that the group is in full capacity in renewable energy, with a further two acquisitions in September and 400 million euros of annual investments, of which “part” is going to be dedicated to electricity. “It will not be a great electrician”, he nonetheless recognized. But Total, which wants to be humble and discrete not to wake the EDF and Engie, is not there by chance. Not really.
