Fossil Fuels

RWE beats E.ON in parallel power spin-offs

7 Oct 2016

The two German utilities took opposite approaches to splitting up their dirty energy assets from newer, clean ones. E.ON spun off the bits investors liked least, while RWE has floated its best parts in a 5 bln euro IPO. The latter path looks smarter in the near term.

RWE gives masterclass in financial alchemy

26 Sep 2016

The troubled German utility is listing a minority stake in its healthy parts - grids, renewables and retail. Nothing will change much operationally. Yet the company hopes the spun-off part, Innogy, will have twice RWE's market cap. If that sounds illogical, that's because it is.

Corporate decline, thy new name is Uniper

9 Sep 2016

German utility E.ON is listing its coal and gas-fired power plants and other unwanted bits and bobs on the Frankfurt stock market. Uniper is wooing investors with high dividends. But over time, the carbon-heavy group will suffer badly from the fight against climate change.

E.ON coal legacy has potential for further smudges

10 Aug 2016

Despite a 3.8 bln euro writedown on its fossil fuel assets, German utility E.ON may still be overestimating the value of its soon-to-be spun off subsidiary Uniper. The likelihood of further adjustments, and a costly nuclear settlement, suggests it needs more capital.

Climate is in firing line from Britain’s EU vote

20 Jun 2016

A UK exit from the EU could weaken the fight against global warming. Brussels would lose a key voice for climate action, and coal-loving Poland’s influence would rise. A smaller EU - and go it alone Britain - would also find it harder to sway big polluters like China and the US.

EU emissions rules yet to hit U.S.-style top gear

15 Jun 2016

Brussels is tightening standards on cars’ CO2 output. It’s the second time European authorities have redrawn industry standards since the VW scandal broke. But to decisively bin its image as a relative soft touch, EU rules on “defeat devices” need to match those of the U.S.

E.ON’s corporate alchemy hinges on nuclear boost

26 Apr 2016

Spinning off fossil fuels and energy trading might unlock around 7.5 bln euros in hidden value at E.ON, if the remaining group can catch up to valuations of peers like National Grid. A favourable deal with Berlin over nuclear decommissioning costs is a key precondition.

Breakdown: Uneven CO2 prices are better than none

11 Dec 2015

Plenty of governments and executives support a uniform carbon emissions cost. Yet it’s unlikely one will emerge from the U.N. climate change confab. That’ll leave a hodge-podge of local schemes in place. As the need for energy innovation rises, it beats having nothing.

Fossil fuels deserve dispassionate analysis

1 Jul 2015

Coal, oil and natural gas are dirty and contribute to global warming. They also make the global economy hum. Substitutes remain more expensive. That matters most in poor countries where GDP growth does the most good. A wise climate policy would count up both sides of the ledger.

U.S. oil chiefs march offbeat to carbon drum

8 Jun 2015

Even as the G7 tries to phase out fossil fuels and Europe’s corporate titans push to price emissions, bosses like Chevron’s John Watson snub the idea, saying “customers want affordable energy.” The steady beat for change means U.S. companies may cede the chance to shape policy.

Coal IPO may buck broader U.S. industry downturn

1 Apr 2015

Consol is preparing to float some anthracite assets. Coal is a troubled business, but the $6 bln U.S. energy group’s mines need little investment and make money at current low prices. And the stock offering is also being packaged as an MLP, which brings some handy tax benefits.

Encana’s pirouette demands greater fanfare

29 Sep 2014

The Canadian driller’s $7 bln acquisition of Athlon Energy cements a commitment to move from gas to shale oil. It’s paying a full price, especially after the recent fall in crude to $94 a barrel. If Encana can get the transition right, though, its valuation will deserve a lift.

Fed adds urgency to Indonesia’s fuel reform test

20 Aug 2014

President-elect Joko Widodo’s first big challenge will be to rethink the country’s $30 billion energy subsidy. Though higher fuel prices will be unpopular, the handout boosts the trade deficit. That makes Indonesia extra vulnerable to capital flight when U.S. interest rates rise.

RWE, E.ON gain little from German energy revamp

8 Apr 2014

Coal and gas power generators might hope to profit from a reform of costly subsidies for solar and wind power. But while the government is trying to cut costs, the target - almost doubling the share of renewables by 2025 - hasn’t changed. RWE and E.ON will continue to suffer.

German push to green power is brave but risky

24 Apr 2013

Europe’s industrial leader wants to wean itself off nuclear power and fossil fuels, so Germany will become the world’s test laboratory for renewable energy. The policy is farsighted, but in urgent need of more German efficiency to keep costs under control.