Sweaty Europe can kill two birds with one pump 7 Aug 2023 In the ‘era of global boiling’ more Europeans need air conditioners. But if they instead installed heat pumps, the bloc could cut carbon emissions and cool as well as warm citizens’ homes. All the more reason for governments to be more generous on subsidies than they have been.
Capital Calls: PIF, Siemens Energy 7 Aug 2023 Concise views on global finance: Saudi Arabia’s big sovereign wealth fund is getting bigger; the $13 bln German company unveiled a $2.4 bln charge due to persistent wind turbine problems.
UK net-zero ‘pragmatism’ is an odd way to get real 4 Aug 2023 PM Rishi Sunak says he cares about decarbonisation, but is also signing off new oil schemes. Uncertain energy transition costs make that a logical political strategy. But the government’s own data suggest relying on volatile gas over renewable power could be an expensive mistake.
How Europe can square the circle on green economy 1 Aug 2023 Shifting away from fossil fuels is an opportunity for the bloc, argues economy tsar Paolo Gentiloni in this Exchange podcast. But it will have to overcome challenges, such as US competition for investment and the EU’s own narrow set of financial tools.
Capital Calls: Uber’s road trip to redemption 1 Aug 2023 Concise views on global finance: The $95 bln ride-sharing firm notched its first operating profit and more than doubled free cash flow, but its valuation is lagging.
Shell may as well try green plug for valuation gap 27 Jul 2023 The $204 bln group’s shares have outperformed US rivals since it flagged a renewed focus on oil, but still lag Chevron and Exxon Mobil. New boss Wael Sawan could try to close the gap by listing his green energy bits. It’s not certain to work, but is better than more buybacks.
UK is in danger of becoming the Nigeria of wind 20 Jul 2023 Ex-PM Boris Johnson wanted Britain to be for green energy what Saudi Arabia is for oil. Yet Vattenfall is halting a key offshore wind scheme, and it’s not clear if the UK will let developers hike prices to offset soaring costs. The more apt OPEC comparison is output-hit Nigeria.
EU has to come clean on costs of green transition 18 Jul 2023 Europe’s race towards net zero carbon emissions will require energy investments of nearly 2% of GDP. And it will cause economic pain in the short term before benefits kick in. Unless governments explain how the bill will be shared, they risk a populist backlash.
BP’s German wind option risks multiple blowbacks 13 Jul 2023 The UK oil major and TotalEnergies have won Berlin’s $14 bln auction to boost green power, helping all three hit wind capacity targets. But the winners only have to pay 10% of the cost in the short term. Given the high prices offered, the risk is the projects don’t get built.
How to crack the climate free rider problem 10 Jul 2023 One reason countries fiddle while the world burns is that they bear the costs of action while everyone benefits. Creating a “climate club” would incentivise nations to pull their weight. But a lot of geopolitical stars first need to align, says Hugo Dixon.
Capital Calls: Diverse workforces 5 Jul 2023 Concise views on global finance: The court’s ruling against affirmative action could make future workforces more homogeneous. That’s a bitter pill for the US Federal Reserve, which has pushed for a more inclusive labor market.
El Nino will brew up potent new economic storm 4 Jul 2023 The Pacific Ocean phenomenon is back. Resultant floods, heatwaves, water scarcity and fires will damage crops and infrastructure, may cost trillions, and augur inflation and rate hikes. Worse, climate change makes such events stronger and more frequent, embedding supply shocks.
Hydropower IPO tests appetite for weather risks 28 Jun 2023 Hidroelectrica’s market sale in Bucharest could value the renewable energy supplier at 10 bln euros, Europe’s largest IPO so far this year. High margins, low debt and fat dividends make the offer palatable. But as droughts intensify, water scarcity may prove a headache.
Capital Calls: Canada is calling Meta’s bluff 23 Jun 2023 Concise views on global finance: The Facebook owner plans to pull news on its platforms in Canada after the country passed a bill that requires internet giants pay publishers. If Australia is any guide, Meta will eventually cave.
Shell makes risky pitch for the middle ground 14 Jun 2023 The $195 bln group’s new CEO Wael Sawan boosted shareholder payouts and refrained from new oil output cuts. His bet is that Shell can echo US peers by lingering in oil, while placing its green bets on less tricky low-carbon areas than European rivals. It’s not certain to work.
Supply chain scrutiny may upend EU solar ambitions 23 May 2023 Renewable groups must forgo photovoltaic components from China’s Xinjiang to comply with forced labour curbs. Yet the region produces 35% of the pure silicon needed in panels, and US firms are scooping up the non-Chinese supply. Enforcing a ban may scupper EU green targets.
Capital Calls: Walt Disney 10 May 2023 Concise views on global finance: Bob Iger’s first full quarter since returning as CEO opened a window onto multiplying challenges across the Magic Kingdom.
Europe’s oil major sweet spot could yet turn sour 4 May 2023 Shell, BP and Total are still making fat profits, and investors seem fine with a slower route out of oil. Rising rates also make wind projects look even less enticing than fossil fuel ones. But longer term, Europe’s oil titans may lose their head start in the shift to net zero.
Oil AGMs presage awkward investor decoupling 28 Apr 2023 BP sailed through its annual shareholder meeting without much blowback on how it had backtracked on climate goals. That will embolden competitors to dismiss pro-green investors’ concerns, and give more to the opposite camp. It is becoming harder to please both sides.
Dialing it down would help overamped utility 27 Apr 2023 After a busted $2.6 bln takeover deal, expansion into Chile and a huge share slump, Algonquin Power is now contending with two pushy investors. Steady returns are the main appeal of such businesses. Spinning off the renewable energy arm would help restore some boring value.