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08.01.2019, Harald Schützeichel

Four french off-grid musketeers (last part): Total

Total, as the fourth French "energy musketeer", is shifting the focus of its activities from a pure investment activity (EDF / ENGIE) via a balance between investment and product manufacturing (Schneider) to an almost exclusive focus on the manufacture and distribution of off-grid products. Total also occasionally invests in off-grid companies, but this is clearly of secondary importance and is only intended as a complement.

Total's solar commitment dates back to 1983: with the joint venture Tenesol (today France's leading solar module manufacturer) and Photovoltech, the company gained early experience in the then still in its infancy (grid-connected) photovoltaic sector. Total continues to expand in this sector: in 2011, for example, it acquired a majority stake in the US company SunPower. SunPower supplies complete solar solutions for households, companies and utilities - right up to megawatt systems.

In the off-grid solar market, Total benefits from its traditionally strong presence in Africa: the company is the largest oil producer on this continent and has nearly 4,300 service stations in 36 African countries. Its distribution in Asia is much smaller by comparison: only the Philippines stands out with 430 service stations (compared with 120 in Cambodia, 245 in China and 18 in Indonesia).

 

Distribution of solar products via the company's own filling station network

Total's off-grid commitment begins in 2010 with the launch of the "Total Access to Energy" programme. The basic idea is to sell plug-and-play solar products through the global distribution network of Total filling stations. The idea may sound plausible at first glance, but it does conceal some serious challenges: This is because filling stations normally only sell products that are intended for immediate consumption. They are not prepared for customers who reappear after some time and complain about a non-functioning solar lamp. This simply doesn't happen when selling petrol, soft drinks or food.

In order to solve this challenge, Total focused extremely on two topics from the very beginning - until today:

Sourcing: Over the years, Total has steadily improved its ability to source products and suppliers that meet quality requirements.

Quality: Suppliers must undergo a qualification process in order to be accepted. This qualification process includes regular audits. Only high product quality reduces both the risk of frequent customer complaints and possible damage to the Total brand. 

The Total Access to Energy program launched in 2010 was designed to test and develop profitable business models on a large scale. In 2011, sales of solar lamps initially began in four pilot regions: Kenya, Cameroon, Indonesia and Congo. As early as 2012, Total introduced the "Awango by Total" name, which is still in use today, to market the solar products sold by Total from various suppliers under a common umbrella brand.

At the same time, marketing efforts were intensified. In order to raise awareness of solar energy in general and the sale of its own products in particular and at the same time promote the "Awango by Total" brand, numerous instruments were developed, such as training tools and manuals, digital product catalogues, customer databases, advertising material, press kits and communication campaigns. 

The number of countries where Awango brand products are available grew rapidly: by the end of 2013 to six, by 2014 already 23 countries, and by 2017 Awango by Total was marketed in over 40 countries. Total's self-set goal: to have 25 million Awango customers in Africa alone by 2020.

The product range, which initially consisted of mobile solar lamps, also developed rapidly: today, Total sells more than 40 different off-grid products, ranging from mobile lamps for supplying electricity to an entire household to minigrids for communities of 200 to 500 households and small businesses.

The now more than 4,000 Total filling stations that sell solar products worldwide in 2017 still account for 60% of sales. The remaining 40 percent is generated through business and distribution partners. Thus, Total can reach regions not covered by the filling station network as well as sell products that cannot be sold at a filling station.

 

Own product line Sunshine

For a long time, Total has relied on products from other manufacturers - until in 2018 it was decided to launch its own product line on the market. In 2018 the "Sunshine" product brand was launched. Total is now developing its own product line, which is only available from them.

Sunshine initially starts with a solar lamp and a solar kit. Larger solar systems and applications (fans, refrigerators) are to follow.

  

Investments

Total Energy Ventures is Total's general venture capital fund for investments in start-ups to promote innovation. Total still does not have a special energy access fund such as EDF, ENGIE and Schneider. Founded in 2008, the "Energy Ventures Fund" has a strategic mission: to identify, promote and exploit innovation. The aim is to monitor potential business areas that could become growth drivers for the Group in the long term in good time. Therefore, the most important selection criterion for the fund's commitment is the potential learning value for the Group. A clearly different approach than the Energy Access Funds of the other energy musketeers!

In the off-grid sector, only three US companies have so far been assessed as increasing the learning value for Total and thus justifying an investment:

  • Sunverge Energy, US (2014): Solar Solutions for Decentralized Generation and Storage
  • Off-Grid Electric, US (2016): PAYG solar home systems
  • PowerHive, US (2016): Modular Mini-grid Systems

 

CLOSURE

A brief overview of the activities of the four French "energy musketeers"