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.
Capital Calls: Buyouts are getting complicated 13 Apr 2023 Concise views on global finance: Both hand sanitizer maker Diversey and software developer Qualtrics recently sold to private equity firms, but new regulatory filings show dealmakers weighing increasing risks.
Capital Calls: FedEx delivers, for now 17 Mar 2023 Concise views on global finance: Shares in the delivery company shot up over 10% on Friday, as cost-cutting measures pay off. Those benefits could easily dwindle.
EU and US green arms race misses bigger picture 16 Mar 2023 The European Union’s response to Joe Biden’s Inflation Reduction Act gives member states leeway to push back with their own green subsidies. Yet plans for production targets are misguided. To decarbonise while managing China risks, it’s better to seek common ground with the US.
EU power rejig may only solve tomorrow’s problem 14 Mar 2023 Spooked by the 2022 gas crisis, the European Commission wants to boost long-term electricity contracts at fixed terms to shield consumers. That’s wiser than splitting the whole power market. Yet while it might aid green investment, it won’t curb prices in the short term.
Germany’s electricity headache has an M&A cure 6 Mar 2023 Berlin may spend over 20 bln euros on the local unit of Dutch-owned TenneT. Every country’s power grid needs an overhaul to make it fit for the green transition, but Germany’s need is especially pressing. Still, relatively low debt also makes it easier to take swift action.
Capital Calls: Ford and CATL 15 Feb 2023 Concise views on global finance: A new battery plant shows U.S. electric-car makers may struggle to cut China out of supply chains.
Europe is playing catch-up in green subsidy race 9 Feb 2023 The U.S. unveiled $369 bln of climate subsidies for consumers and manufacturers. In this Viewsroom podcast, Breakingviews columnists explain why Brussels may need to launch a similarly ambitious plan or risk losing its share of jobs of the future.
Green subsidy race may be what the world needs 6 Feb 2023 High carbon taxes would be the best way to combat climate change. In their absence, subsidies are a good second best. As the global elephants – the U.S., EU and China – roll out financial aid, the key will be to ensure some fair play so others don’t get trampled, says Hugo Dixon.
China ban would slow, not halt, Western solar push 3 Feb 2023 Reacting to the chip war, Beijing may ban the export of technology for making solar panels, a $235 bln sector it currently dominates. Yet the West already has green energy know-how. Creating a rival industry without Chinese expertise may be slower and costlier but not impossible.
Big Oil mega-deals would put investors on the spot 2 Feb 2023 Shell and BP are printing money but have rock-bottom valuations. Punts by U.S. giants Exxon Mobil or Chevron are financially viable, if politically tricky. European shareholders may face a tough choice: sell out to a less green rival, or hope that risky renewable bets pay off.
Tycoon-burned Sun Cable would shine with new owner 1 Feb 2023 Top backers Andrew Forrest and Mike Cannon-Brookes may compete to buy the insolvent solar power export firm. They are pursuing risky plans. Keeping the energy in Australia should allow rival mooted bidders like Macquarie and Iberdrola to pay more and generate better returns.
Orsted increasingly merits its investor blowback 20 Jan 2023 The $38 bln Danish wind farm group flagged lower-than-expected 2023 targets as its key offshore arm struggled. Shareholders always granted Orsted a premium valuation, due to growth expected from new projects. Construction delays and rising rates are putting that in question.
Snam rethink reflects Europe’s new energy reality 19 Jan 2023 The $18 bln network operator is hiking spending to boost gas flows into Italy and the EU. Stable revenues from such investments can help new CEO Stefano Venier lift EBITDA. But a lighter push into hydrogen and green projects suggests a slower European shift from fossil fuels.
Fortescue boss sets himself up for climate bonanza 7 Dec 2022 Twiggy Forrest has bought wind-farm firm CWP for some $2.7 bln via his personal fund. Being the largest owner of Aussie renewables is a great hedge for his miner’s punt on green hydrogen. And if the gas takes off, he’ll earn even more selling the clean energy needed to make it.
Debt woes will restrain Enel’s global ambitions 22 Nov 2022 CEO Francesco Starace vowed to cut the 52 bln euro utility’s net debt by 21 bln euros, amid spiralling gas costs. Focusing on fewer regions looks sensible and may shield investments and dividends. But it will hinder Enel’s efforts to stay one of the top energy transition winners.
Energy crises speed up the green transition 22 Nov 2022 In 2022, war and power shortages have led to more fossil fuel use. But they also act as a catalyst for the rollout of renewable energy. In this edition of The Exchange podcast, ex-Snam boss Marco Alverà tells George Hay how Europe’s leaders can capitalise on this dynamic.
Indonesia’s green step not yet a leap for mankind 18 Nov 2022 Jakarta will get $20 bln of overseas public and private cash to help it decarbonise. The deal struck at the COP27 summit paves the way to channel capital to poor countries at the required scale. But big foreign transfers are fraught. Lenders have plenty of reason to hesitate.