Renewable Energy

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.

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.

Enel will be hard to dislodge from green perch

5 Feb 2021

The Italian utility has become one of the world’s top renewable energy players and achieved stellar returns under CEO Francesco Starace. A booming green market and a big project pipeline mean its lead will outlast his tenure. Oil majors entering the market will trail behind.

Shell’s strength jars with sedate green strategy

4 Feb 2021

The $140 bln oil giant earned $4.8 bln last year as rivals made losses. Next week’s strategic overhaul is unlikely to involve big cuts in crude output or BP-style wind power targets. The cautious approach runs counter to its green-leader image – and the prevailing investor mood.

BP walks green high wire without a safety net

2 Feb 2021

The $72 bln UK oil major missed analysts’ expectations and announced a $6 bln annual loss. CEO Bernard Looney’s bigger problem is that his firm’s shares have underperformed since he committed to wind and solar. Investors may be fretting that his pivot from crude is too violent.

Bond markets will be new climate vigilantes

27 Jan 2021

Booming demand for sustainable funds and new EU rules will make debt investors more wary of buying securities issued by polluters. There are already signs that is happening in the oil and gas sector. Higher funding costs should be a powerful spur for companies to get serious.

Naturgy offers cut-price route to green transition

26 Jan 2021

IFM is spending 5 bln euros on 23% of the Spanish utility. Naturgy’s depressed shares and the Australian fund’s use of debt will juice its returns. Moreover, it’s a cheaper way of surfing the renewable energy wave than boarding rivals like Iberdrola.

How to pick the hydrogen industry’s future Amazon

22 Jan 2021

The element could play a major role in decarbonisation, which has sent shares in related companies skyrocketing. As with the 1999 tech-stock boom, investors can’t tell which group can corner the market. But they can see which uses of hydrogen will become cost-competitive first.

Total’s Indian green energy splurge has two hedges

18 Jan 2021

The French giant is upping its exposure to renewable power by buying 20% of Adani Green Energy. The $2.5 bln price tag is well below the target’s market value. Teaming up with tycoon Gautam Adani may also help avoid problems suffered by other Western energy groups in India.

Viewsroom: Predictions and prescriptions (Part 1)

23 Dec 2020

Governments will become activist investors; U.S. airlines will merge; data centres will be the new ESG target; energy giants to consider renewable spinoffs; Tesla will buy Daimler; European soccer gets more American and more. Rob Cox, Peter Thal Larsen and Lauren Silva weigh in.

Big Oil will cash in on sun and wind

21 Dec 2020

Covid-19 and ESG have crushed the stock prices of companies like Total and BP. Listing their growing renewables businesses would help capitalise on inflated valuations. There’s a hedge of sorts: if the spinoffs don’t work they can be bought back on the cheap, Iberdrola-style.

Repsol stake sale could speed up green shift

16 Dec 2020

The 13 bln euro Spanish oil group may offload 25% of its gas stations arm. Flogging a chunk of what is a relatively highly valued business could raise 2.5 billion euros. That would provide critical firepower to get Repsol’s renewable energy capacity closer to rivals like Total.

Corona Capital: Gaming M&A, Beauty’s bold face

9 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: Consolidation in video games reaches the next level as Sweden’s MTG buys Hutch Games for $375 million; and Spanish cosmetics, fashion and perfume group Puig predicts revenue will double by 2023.

UK’s cheaper zero-carbon route comes at right time

9 Dec 2020

Decarbonising the British economy could cost less than 1% of GDP a year, Britain’s climate adviser reckons, well below its previous estimates. Politicians still need to act on the plan. But a credible roadmap is a guide for others ahead of next year’s UK-hosted global conference.

Australian pension giant braves steep M&A curve

9 Dec 2020

New Zealand infrastructure investor Infratil snubbed a $3.8 bln takeover bid from AustralianSuper. Its first solo acquisition target enjoys a solid negotiating position and Goldman on defence. For this to be more than a learning experience, it will have to dig deeper.

Funky debt bonanza is breeding complacency

8 Dec 2020

Companies from BP to Gazprom are issuing more bonds that count as equity than ever before. Low rates and investors’ thirst for yield explain why, yet the benefits of such hybrids are modest. To avoid future strife, companies should sell debt that is better at absorbing losses.

Activist minnow needs bigger fish to fry Exxon

7 Dec 2020

The $176 bln oil major has rarely listened to past investor pleas, so demands from a $40 mln stakeholder seems a non-starter. Yet its recent record of capital destruction may be enough for bigger funds to join in. Taking on the oil giant is a way to justify ESG lip service, too.

Green investing’s killer app faces growing pains

7 Dec 2020

Sustainable finance types long for a single metric showing how well companies are aligned with net zero emission targets. The Holy Grail exists, but there are many different versions. A harmonised methodology ahead of next year’s Glasgow climate summit looks ambitious.