Europe’s pain will be ultimately worth it 31 Oct 2022 The European Union faces a tough period as the energy crisis bites and debt troubles return. But the bloc could have the world’s cheapest and cleanest energy by the mid-2030s and it will probably emerge stronger geopolitically, says Hugo Dixon.
Aussies put net-zero nationalisation on the map 21 Oct 2022 The leader of Victoria says the state will take a controlling stake in new green power projects if he’s re-elected. That might crowd out capital. But done right, public ownership can spread financial risks and align policy with investors – just what the private sector wants.
Capital Calls: Coal’s fear-then-greed trade 19 Oct 2022 Concise views on global finance: Shares of Aussie coal miners fell on production disruptions from floods, only to quickly rise as investors bet on tighter supplies and higher prices.
Europe’s energy crisis nears winter of discontent 18 Oct 2022 Germany, Italy and others have scrambled to replace Russian gas and pipeline attacks have become a concern. The Oxford Institute for Energy Studies’ Jack Sharples tells The Exchange podcast Europe must learn to live with less power. Next year may be even more challenging.
Subsidies lure BP to join U.S. green gold rush 17 Oct 2022 The UK energy giant is paying a 54% premium for Archaea, which extracts gas from landfill. Government support helps explain why BP thinks it can more than quadruple its target’s EBITDA by 2030, earning a double-digit return on its $4 bln investment. Others are bound to follow.
Sovereign debt greens yet net-zero pledges darken 13 Oct 2022 Saudi Arabia’s wealth fund is the latest public body to issue securities to fund renewable assets. Strong buyer demand and the chance to flaunt action on climate change explain the boom. Yet national decarbonisation targets remain weak, and green bonds do little to improve them.
Westinghouse deal will overpower immediate fallout 12 Oct 2022 Brookfield Renewable and uranium miner Cameco are teaming up to buy the company for $7.9 bln. Servicing and decommissioning nuclear plants generates steady cash flow, but the market reaction was toxic. There’s plenty of upside in Eastern Europe and the energy transition, however.
Green hydrogen revolution risks dying of thirst 5 Oct 2022 Backers make three miscalculations about the gas’ key input, water: that they won’t need much, that it’s cheap, and that desalination is a breeze. Some $700 bln is needed for projects from Australia to Saudi to Europe, but water scarcity means many will be left high and dry.
RWE’s U.S. swoop is investors’ gain, Europe’s loss 3 Oct 2022 Germany’s largest utility is paying $7 bln to make a push in U.S. solar power just as juicy subsidies are set to fuel a clean energy boom. That and a fair price tag should please investors. The move risks depriving Europe of green investments as it fights an energy crisis.
Ukraine has more pluses than minuses for climate 26 Sep 2022 The Russian invasion has prompted other countries to boost gas production and burn more coal. Climate diplomacy is on ice. But this crisis will also prompt a dash for cheaper and more secure renewable energy. That helps the fight to slow global warming, says Hugo Dixon.
Net zero woes go beyond lack of global cooperation 20 Sep 2022 The International Energy Agency frets that poor collaboration between states will keep emissions high. But the struggles of green groups like ITM Power suggest countries aren’t doing enough to help domestic markets either. Energy policy needs to do more than fight today’s crisis.
Petrodollar rush may disappoint Western financiers 20 Sep 2022 In prior energy booms, like in the 1970s, the proceeds wound up in U.S. banks and bonds. OPEC’s $907 bln haul in 2022 is smaller, and winners like Saudi Arabia need cash to pivot away from oil. Bankers may not see a developed world equities and debt bonanza on the same scale.
Capital Calls: Ralph Lauren 19 Sep 2022 Concise views on global finance: The $6 bln retailer known for its iconic Polo shirts is cheaply valued compared to European counterparts.
Europe energy fallout will cascade down the years 12 Sep 2022 The gas crisis is a long-term problem which will make the region poorer and less competitive while saddling it with higher public debt. Dealing with this as well as high inflation will cause further political ructions which will cascade down the years, says Hugo Dixon.
Adani’s Fitch debt spat is good news all round 8 Sep 2022 The U.S. group’s CreditSights unit rankled the $255 bln opaque Indian behemoth last month by calling it “deeply overleveraged”. But it got Adani’s executives talking more, and investors now have two clearer views of the company to weigh up. That’s a transparently good outcome.
Shell’s next boss looks a shoo-in 2 Sep 2022 The $192 bln energy group’s veteran CEO Ben van Beurden is likely to depart next year. Shell’s heads of oil drilling, refining, and finance all merit consideration. But gas and renewables boss Wael Sawan, who holds the key to Shell’s future revenue growth, is the logical choice.
Climate both dries and drowns case for hydropower 31 Aug 2022 The IEA and others reckon hitting net zero requires doubling the energy source’s output. But aridity from China to the Americas highlights a big vulnerability. Flood risk is even more widespread. Add environmental degradation and hydropower is often more trouble than it’s worth.
Paris and Berlin’s windfall tax timidity is futile 19 Aug 2022 France and Germany oppose a raid on firms profiting from the energy crisis. Berlin could borrow more, and President Macron has pledged not to hike taxes. Yet given it won’t make investors see either country as way more business-friendly, the reluctance makes little sense.
American solar plan one-ups gas-junkie EU 4 Aug 2022 A U.S. bill is offering $30 bln in tax credits to companies to build solar panels at home. That will help crack China’s control of the green supply chain. The EU could increase solar capacity seven times by doing something similar. That requires better coordination and focus.
Australia green fail is global net-zero liability 20 Jul 2022 Canberra is pledging action after a grim report detailing Down Under’s deteriorating environment. But coal and gas exports help fuel disasters at home and abroad, like Europe’s wildfires. Refusing to tackle it sends a gloomy signal about countries’ willingness to cut emissions.