Energy

EU debt fears hinder U.S. green subsidies riposte

24 Jan 2023

Ursula von der Leyen has pledged a European response to protectionist U.S. energy handouts. The European Commission president can improve permitting speed and offer token subsidies. But her best weapon, a permanent form of the EU-wide pandemic bond-sale programme, is far off.

German economic engine is due an overhaul

23 Jan 2023

Slowing global trade hit the country’s exports while higher energy prices boosted imports. The current account surplus shrank last year to 4% of GDP, its lowest level since 2003. As globalisation recedes, Berlin has to reassess the old export-led economic model.

Orsted increasingly merits its investor blowback

20 Jan 2023

The $38 bln Danish wind farm group flagged lower-than-expected 2023 targets as its key offshore arm struggled. Shareholders always granted Orsted a premium valuation, due to growth expected from new projects. Construction delays and rising rates are putting that in question.

Snam rethink reflects Europe’s new energy reality

19 Jan 2023

The $18 bln network operator is hiking spending to boost gas flows into Italy and the EU. Stable revenues from such investments can help new CEO Stefano Venier lift EBITDA. But a lighter push into hydrogen and green projects suggests a slower European shift from fossil fuels.

AGL’s new boss has a $14 bln target on his back

19 Jan 2023

That’s how much Damien Nicks needs to turn Australia’s top carbon emitter into a renewables giant. Unlike predecessors, he has a proactive board, improving earnings and a half-placated billionaire agitator. He’ll still get hauled over the coals if he can’t find funds quickly.

Global energy prices face a turbulent 2023

12 Jan 2023

The cost of natural gas has halved from a peak last year thanks to warmer weather and bulky European stores. In this Viewsroom podcast, Breakingviews columnists discuss why it’s too early for companies and households to rule out further supply shocks and price volatility.

Capital Calls: California flooding

11 Jan 2023

Concise views on global finance: Heavy rainfalls have revealed the cracks in California lawmakers’ disaster spending measures, that have helped to prepare for fires and earthquakes.

Capital Calls: McDonald’s ex-CEO fine

10 Jan 2023

Concise views on global finance: The Security and Exchange Commission’s decision to slap former fast food chain boss Stephen Easterbrook with a penalty is a convoluted way to the right outcome.

European inflation control is a double-edged sword

6 Jan 2023

Prices in Spain or France have risen less than in other big euro zone economies. One reason is lower dependence on Russian energy, but government price controls also helped smooth the shock. The risk is that suppressed inflation will catch up after the crisis subsides.

Green surge is circuit breaker on nuclear revival

4 Jan 2023

High energy prices and decarbonization desires have reignited plans to build atomic power plants. Yet wind and solar are growing far faster, even in China, because they’re quicker and cheaper to build. And expanding power storage is eroding nuclear’s big advantage: reliability.

Bulb bailout exposes UK’s pseudo power market

23 Dec 2022

Octopus Energy is receiving a 4.5 bln pound taxpayer backstop to take on the bust supplier’s 1.5 mln customers. Like the government’s subsidy of household bills, the deal reveals the limits of Britain’s supposedly privatised power market. The question is when politicians notice.

Climate change will become a CEO dealbreaker

22 Dec 2022

For corporate chieftains who profess to recognize the threat of climate change, the balancing act between pursuing shareholder value and helping the planet avoid a crisis is becoming unsustainable. Breakingviews imagines a missive from a CEO who opts to put values before value.

Capricorn mess mixes new and old ESG goofs

22 Dec 2022

Shareholders are angry at a takeover of the $950 mln oil group formerly known as Cairn Energy, months after they rejected a separate deal. It’s partly about price. But it also reflects investors’ new concern over environmental risks, and a very old dislike of poor governance.

EU pulls its punches on making polluters pay

20 Dec 2022

The bloc has expanded its emission trading system, but will allow heavy industry to enjoy free permits until 2034. Protecting European companies hit by high energy costs is understandable. Yet the freebies risks undermining a new carbon tariff, and the EU’s own green goal.

UAE will look to a world beyond OPEC

19 Dec 2022

The United Arab Emirates suffers from the oil cartel’s output restrictions. Distancing itself from the club would boost revenue and potentially attract more Western capital. President Mohammed bin Zayed al-Nahyan has a good moment to do so when he hosts the COP28 climate meet.

Anti-ESG movement has investment case

12 Dec 2022

American coal firms are generating so much cash that at current rates, it equals their market value, including debt, in under two years. Oil firms like Exxon could earn back their value in five. Even if recession squeezes profit and decarbonization looms, valuations are too low.

Capital Calls: Rio Tinto, Grocery delivery M&A

9 Dec 2022

Concise views on global finance: After a shambolic process, the $118 bln miner has succeeded in buying out the 49% of Turquoise Hill Resources it doesn’t own; Turkish grocery delivery player Getir gobbles up German rival Gorillas for $1.2 bln.

Exxon and Chevron give in a little to temptation

8 Dec 2022

The two oil giants plan to increase investment in shale next year, to a combined $39 bln, and reduce carbon intensity. Raising output and growing sustainability could even boost capital returns to investors. The worry is that the industry regains its taste for profligacy.

Saboteurs add new twist to U.S. outage problem

5 Dec 2022

Over 40,000 customers were plunged into blackouts out after attacks on two U.S. substations. Vandalism on the power grid is costly to secure against, but utilities continue to face much larger vulnerabilities. The threat from storms is orders of magnitude larger and growing.

Eni’s $6 bln Neptune swoop will be a haggle-fest

1 Dec 2022

Italy’s $52 bln oil major may bid for the private equity-backed gas producer. Windfall tax and recession risks make the $10 bln price tag from last year’s mooted IPO unlikely. But Eni’s scope for synergies and need to pivot to gas give owners like CVC scope to hold out for more.