Energy

National Grid’s $11 bln green switch looks smart

18 Mar 2021

The UK infrastructure operator is buying a big chunk of the local electricity distribution network, paid for by selling some of its U.S. arm and UK gas assets. CEO John Pettigrew is betting power assets will grow faster as the energy transition speeds up. It’s worth paying for.

South Africa enters greener bond-market crosshairs

11 Mar 2021

With 90% of its power coming from coal, the Rainbow Nation is one of the worst CO2 emitters. Mining’s political heft also means foot-dragging on climate policy. With big external funding needs, the kick from bond investors when they flick the green switch will hurt hardest.

Oil price supercycle could be super short

8 Mar 2021

Crude spiked above $70 a barrel, regaining pre-virus levels. It could climb even higher given OPEC is holding back supply and global policymakers are stimulating economies. But if lofty prices encourage production by those outside the cartel, they may not last that long.

Capital Calls: American Airlines, Crypto PayPal

8 Mar 2021

Concise views on global finance in the Covid-19 era: The U.S. carrier is issuing new debt and hocking some airline miles to pay back the U.S. Treasury loan that carried restrictions on pay and dividends; PayPal investors give a shrug over another dive into bitcoin-land.

UK $3 bln power LBO relies on big green reboot

5 Mar 2021

Aggreko, which rents out generators, agreed a deal with private equity buyers TDR and I Squared Capital. The company suffered from virus-hit event cancellations, and needs investment to ditch dirty diesel units. A green makeover may deliver a higher valuation, and juicy returns.

Japan and Oz utility reflect on climate sins

5 Mar 2021

A fund is suing Tokyo for backtracking on promised renewable-energy incentives. Australian electricity provider AGL just took a $1.5 bln hit on pricey long-term wind contracts. Each would have been better off taking the other’s approach.

Market jitters make energy IPOs suddenly look good

4 Mar 2021

Wintershall Dea is preparing to list. Fears over higher borrowing costs make cash-generative oil and gas companies look relatively attractive compared to the high growth stocks investors have been dumping this year. Stabilising crude prices could make for an even sweeter spot.

Capital Calls: OPEC+, Michaels

4 Mar 2021

Concise views on global finance in the Covid-19 era: Recovery concerns keep a lid on the oil cartel’s supply taps; Apollo tries its hand at craft retailer Michaels.

Capital Calls: BoE, Soros, Infrastructure, Pay

3 Mar 2021

Concise views on global finance in the Covid-19 era: The Bank of England starts to embrace the green transition; George Soros has some advice for France; Joe Biden gets a timely reminder of the importance of infrastructure; climate laggards risk getting hit in their wallets.

Xi’s green campaign will restructure state sector

3 Mar 2021

Shares in energy champions like Sinopec are rallying as they announce plans to serve Beijing’s carbon-neutral push. State firms generate 4.5% of global GDP; cleaning them would pay big dividends. But smaller players can’t pivot so easily. Green progress means dirty defaults.

Indian renewables SPAC sets temperate tone

24 Feb 2021

Goldman-backed ReNew Power is listing in New York via a blank-cheque firm. It’s a decent bet on India’s pivot to clean energy, with a structure and valuation that factor in the industry’s flaky customers. Future Asian SPAC deals in waiting may not be so well grounded.

Americans support a reliable grid, in theory

17 Feb 2021

Nearly 3 million Texans are without power days after a cold snap crippled infrastructure. Free market policies and the desire to avoid oversight deserve blame. Yet California’s power isn’t great either. Reliable grids are expensive. That’s unpopular for all political persuasions.

Capital Calls: Bubble alert

16 Feb 2021

Concise views on global finance in the Covid-19 era: Bitcoin burst through $50,000, and global fund managers are maximum bullish on the pace of the recovery from the pandemic.

Viewsroom: Tesla/bitcoin, Hydrogen, French finance

11 Feb 2021

Elon Musk has gone full cryptocurrency. Tesla’s $1.5 bln bitcoin buy is a wink to virtual-investment, anti-establishment fervor, if a challenge to accounting rules, Richard Beales argues. Meantime, Japanese carmakers are going gaga for hydrogen, and Parisian finance is in tumult.

Shell’s new plan tests investors’ green resolve

11 Feb 2021

The Anglo-Dutch group’s decarbonisation strategy will see it stay big in oil longer than BP. European investors now have a choice between Shell’s walking pace and its rival’s handbrake turn into wind and solar. It could become a gauge of how seriously investors take green issues.

Engie’s timid breakup needs green boost

11 Feb 2021

The $39 bln French utility’s shares have lagged peers for years. New CEO Catherine MacGregor is simplifying the rambling group by selling part of its services unit. Spinning off the renewables division could give the stock a roughly 50% bump, and enable more climate-friendly M&A.

Exxon Mobil-Chevron deal options

10 Feb 2021

The two U.S. energy giants have discussed combining. Either one could buy the other at a premium, or they could try a merger of equals. The financial shape of the combined company would be different in each case.

Capital Calls: KKR, the investment bank

9 Feb 2021

Concise views on global finance in the Covid-19 era: The private equity firm run by Henry Kravis is building a useful capital-markets business, with almost half its deals last year for outside clients.

UK wind auctions are frothy for a reason

8 Feb 2021

The toppy price paid by BP for wind turbine-friendly seabed reflects its desperation to pivot to green energy. But the UK’s subsidy-laden regime is also more attractive than those of other states. That makes wind maven Orsted’s reluctance to match the UK major even more striking.

Capital Calls: Super Bowl, Poison pills, Experian

8 Feb 2021

Concise views on global finance in the Covid-19 era: America’s game doesn’t benefit from scarcity value; Cubic’s poison pill serves a purpose; And Brazil’s cyberattack has a price for Experian.