Utilities

Uniper investors head for bailout they don’t merit

5 Jul 2022

The 4 bln euro German utility’s value has been smashed by its need to expensively replace Russian gas. Given Berlin is mulling a way to spread this cost, Uniper shares may yet rebound. The outcome may wind up being more generous than its main Finnish shareholder deserves.

Aussie energy crisis demands both carrot and stick

23 Jun 2022

Electricity trading restarted after a week-long hiatus. Canberra wants to pay generators to guarantee supply from 2025. Until then, outages will linger. A windfall tax, or the threat of one, on coal miners and gas drillers like Exxon Mobil and Santos could spark short-term fixes.

How the UK can cut power bills and go green

3 May 2022

The government is so scared of the cost-of-living crisis that it doesn’t want consumers to pay for low-carbon wins like heat pumps, even though this cuts energy bills in the long run. Instead utilities could do the job and spread the cost over 20 years, argues Hugo Dixon.

Capital Calls: Dubai listings, Epic Games

12 Apr 2022

Concise views on global finance: State-owned utility DEWA defies the global IPO gloom as its shares jump 20% on their debut; Sony is pumping another $1 bln into privately held metaverse evangelist Epic Games at an epic $32 bln valuation.

National Grid gas sale has green edge on Macquarie

28 Mar 2022

The $54 bln UK company is selling 60% of its gas pipelines arm to a group led by the Australian finance house. The $13 bln deal has financial benefits for both. But National Grid’s switch to electricity is more immediate than the buyers’ plan to pump hydrogen through the pipes.

Dubai’s $34 bln utility float tees up IPO drive

25 Mar 2022

State-owned DEWA will be the emirate’s largest listing since 2007. Its pricing muscle and generous dividend are drawcards, as is the cheap valuation. That reflects the political desire for the debut to set the stage for follow-up IPOs, and puts rival regional bourses on notice.

Energy windfall taxes are messy, unfair, and vital

23 Mar 2022

Europe can theoretically raise hundreds of billions of euros from utilities benefitting from soaring energy prices. To get near that this year, some utilities could be shaken down inefficiently or unjustly. Public anger at rising energy bills means states still have to try.

Energy market bailout is cheaper of two evils

18 Mar 2022

Europe’s gas producers and utilities want state support to offset the wild swings in commodity prices since Russia invaded Ukraine. Given this could aid big oil companies like Shell, that sounds wrong. But a market breakdown would be worse, and states can levy windfall taxes.

Oil self-sanctioning is unstable weapon for West

3 Mar 2022

Traders and utilities are refusing to buy crude and gas from Russia, even though sanctions allow it. Insofar as this turns up the heat on the Kremlin, U.S. and EU leaders may not mind. The danger is that spiking prices alarm voters and lead to strains in the Western alliance.

Naturgy split may be less than sum of its parts

11 Feb 2022

The 25 bln euro Spanish power group is putting renewable energy and gas under one roof and fencing off its regulated network business. It could create value if investors see gas as less worthy of a discount than they have in the past. But that’s a pretty big if.

Rishi Sunak bets he’s a good gas trader

3 Feb 2022

The UK chancellor is spending 9 bln pounds to help consumers facing a 50% hike in energy costs. If gas prices fall back by next year, he’ll get most of that back. If they don’t, the state faces a bigger hit. Either way, this package looks too small to prevent a political furore.

EDF is latest utility in energy crisis hurt locker

14 Jan 2022

The state-controlled French group’s shares dived after the government ordered it to sell cheap nuclear power to smaller rivals. It’s no surprise France is shielding consumers from high wholesale prices in an election year. EDF won’t be the last European energy provider to suffer.

Boris Johnson has Europe’s biggest energy headache

7 Jan 2022

Customers across Europe are braced for higher utility bills, prompting governments to divide the pain between users, suppliers and the state. But Britain faces the biggest hike and has done the least to cushion the blow. That makes the prime minister’s position more perilous.

Capital Calls: Enel’s payments punt

24 Dec 2021

Concise views on global finance: The 70 bln euro utility is paying up to 361 mln euros for a relatively pricey punt on fellow Italian payments firm Mooney.

Capital Calls: Tesla, Daimler

11 Nov 2021

Concise views on global finance: The electric-car maker’s directors have, like Elon Musk, cashed in; the German company is racing against Agnelli-controlled CNH Industrial to spin off a trucks division.

PG&E victim payout experiment goes up in smoke

11 Aug 2021

In the utility’s bankruptcy, people who faced losses from wildfires received roughly $6.8 bln of stock in compensation. It’s now worth $4 billion. Handing a volatile asset to those who have already lost out is risky – especially if, as at PG&E, problems haven’t been fixed.

Capital Calls: Trucking IPO

7 Apr 2021

Concise views on global finance in the Covid-19 era: Startup TuSimple will be listing shares via a traditional initial public offering.

Utilities could use more Sage, less spice

10 Mar 2021

Activist Carl Icahn just jolted the U.S. power sector with a stake in $19 bln FirstEnergy. Paul Singer’s Elliott popped in and out, too. Yet utilities need to make grid investments that won’t immediately help shareholders. Warren Buffett's buy-and-hold approach fits better.

Corona Capital: Food delivery, Video games

25 Jan 2021

Concise views on the pandemic’s corporate and financial fallout: Hedge fund Tiger Global gets a taste for food-delivery investments; and Jagex, developer of fantasy game “RuneScape,” is flipped to Carlyle less than a year after its last sale.

Leaky Suez defence only enhances takeover appeal

18 Jan 2021

CEO Bertrand Camus, under siege by would-be acquirer Veolia, wants a compromise. Details are scant, but it could mean infrastructure funds taking a stake in the $13 bln French waste company. The lack of synergies and added complexity makes rival Antoine Frérot’s bid look cleaner.