Energy

Saving energy now is an EU no-brainer

28 Jun 2022

The bloc has hiked LNG imports by 50% to replenish storages and cut its Russian gas dependency. But if Moscow turns off the taps, Germany could sink into recession. All the more reason to kick off energy-saving measures this summer and try to curb gas prices by cutting demand.

G7’s Russia cap could send oil prices up, not down

28 Jun 2022

The developed nations club wants to cut Moscow’s revenue by curbing crude export prices. To work, a cap needs to be global in scope, air-tight to avoid sanctions evasion, and have Russian acceptance of the forced discount. Without these it may mean less supply, and higher prices.

Capital Calls: Russian default, Inflation and debt

27 Jun 2022

Concise views on global finance: Moscow defaulted on its foreign debt for the first time in over 100 years, leaving bondholders in limbo; the Bank for International Settlements wants rates raised “quickly and decisively”, but is also worried about higher borrowing costs.

Germany’s gas action plan pulls its punches

24 Jun 2022

As Gazprom restricts supplies, Berlin is switching coal power plants back on and squabbling over nuclear energy. But it’s still shielding Germans from high prices. A better ploy would be to use fiscal buffers to protect poorer citizens, thus incentivising everyone to use less.

Capital Calls: Bank stress tests, Japan inflation

24 Jun 2022

Concise views on global finance: U.S. lenders passed the latest Federal Reserve capital exams, but they’re bound to be more stressful next time; the country’s consumer prices rose 2.1% in May, intensifying a standoff between the central bank and bond investors.

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.

Green investors need to get their hands dirty

22 Jun 2022

Most money managers fight climate change by shunning stocks of polluting companies. By contrast, so-called transition funds target dirtier assets to clean them up. Though the approach brings risks, it could also deploy trillions of dollars of green capital in a smarter way.

Capital Calls: SoftBank Arm-twisting

22 Jun 2022

Concise views on global finance: The UK government may be eyeing desperate measures to keep SoftBank-owned chip group Arm's IPO in London.

Capital Calls: Hydrogen IPO, Call centre M&A

20 Jun 2022

Concise views on global finance: Despite Thyssenkrupp postponing its clean energy listing, De Nora is still pressing on with its own one at a lower 3 bln euro valuation; customer-service group Sitel agrees to buy 2.6 bln euro rival Majorel in a cash-and-stock deal.

Power providers tempt Wall Street-style backlash

17 Jun 2022

Australia halted electricity trading because generators were “gaming” the system, Prime Minister Anthony Albanese says. Such behaviour risks inviting widespread uproar as banks did during the financial crisis. It’s a bad spot to be in as a new government upgrades climate goals.

Expensive capital will slow the green transition

17 Jun 2022

Strategic investors with low-cost, long-term funding have put polluter India on course to hit 2030 goals. TotalEnergies’ plan to help Adani spend $50 bln on green hydrogen hints at ongoing support. But such sponsors may have to step it up as rising rates and risk aversion bite.

Aussie energy crisis is an embarrassment of riches

10 Jun 2022

A looming gas supply shortage and high-power prices are due to years of bad policy in a country that should be a renewables poster child. It’s a chance for new Prime Minister Anthony Albanese to layout a comprehensive clean energy plan that will foster a green investment boom.

EU gas jumps from Russia frying pan to U.S. fire

9 Jun 2022

An explosion in Texas knocked out nearly 20% of U.S. liquefied natural gas exports for three weeks or more. That’s a setback for European nations counting on other countries to ease their dependence on Russian pipelines. For America, the excess supply is a temporary respite.

Europe’s energy subsidies help Putin and pollution

8 Jun 2022

EU leaders are trying to cushion the blow of rocketing energy bills. But keeping a lid on gas prices encourages consumption, which enriches Russia and hinders decarbonisation. Better focus public support on poorer households, and push harder on energy efficiency.

Capital Calls: China and Australian coal

7 Jun 2022

Concise views on global finance: Chinese coal miner Yankuang Energy may have to increase its offer to Yancoal Australia’s minority shareholders.

Hydrogen IPO finds rare pocket of market optimism

6 Jun 2022

Italy’s De Nora, which makes components to produce a green variety of the gas, is seeking a June listing. That’s bold after choppy markets deflated other high-flying upstarts. Tapping into Europe’s drive to end its fossil-fuel dependency will help pump up a 5 bln euro valuation.

Glencore rebuff sets up less noxious coal deal

2 Jun 2022

The trader calls a Chinese offer for the 38% of Aussie miner Yancoal it doesn’t own “unacceptable”. That’s an understatement. It’s a deeply discounted deal offering payment via a convertible bond. Political risk looms large too, but Yankuang has to make the financials less toxic.

Global cracks complicate West’s energy transition

2 Jun 2022

Modern civilisation is built on fossil fuels. If past shifts are a guide, switching to renewable energy will take decades, says Edward Chancellor. Conflict with Russia and tensions with China make this harder. The West faces a choice between decarbonisation or deglobalisation.

Ukraine war helps China’s coal addiction stack up

2 Jun 2022

President Xi Jinping’s administration is boosting coal production to stave off power cuts. The top emitter is embracing the fossil fuel tightly as wealthy nations bid aggressively to replace Moscow’s natural gas supplies. The rational financial choice is a firm blow to net zero.

Capital Calls: Inflation-proof Dr Martens, Saipem

1 Jun 2022

Concise views on global finance: The UK bootmaker’s polished results offer glimmer of hope to embattled retailers; the Italian energy-services group reassures investors with $550 mln sale of its onshore drilling unit.