Spain’s utility saga calls for tough balancing act 18 Apr 2024 The UAE wants to buy 40% of 22 bln euro Naturgy from its private equity owners. That would usually require a full takeover, but Madrid has form on protecting key infrastructure. Spain will have to balance its desire to retain control with the need not to scare its bidder away.
Thames Water fix requires everyone to take a bath 4 Apr 2024 One way to repair the ailing UK utility is to hike consumer bills. The government could also hose the holders of the group’s 17 bln pounds of net debt. That might make the politics of the sorry saga marginally less toxic – and even give Thames a shot at luring new investors.
AI’s power surge short-circuits longer-term plans 1 Apr 2024 Data centers account for 2.5% of the US grid, and machine learning is supercharging growth. Where and how to build megaplexes consuming as much electricity as a small nuclear plant are the immediate problems, but they’re solvable. Calculating future demand is the real conundrum.
UK’s leaky coffers are Thames Water’s lifeboat 28 Mar 2024 The utility is drowning in $19 bln of debt and may collapse in 2025 if its regulator doesn’t approve higher bills. A nationalisation could be the best solution but the government isn’t flush with cash. Unless PM Rishi Sunak breaks his fiscal rules, consumers will have to pay up.
Europe’s green giant is focusing on safer bets 21 Mar 2024 Iberdrola is upping investment on ageing power grids. The $79 bln Spanish utility is also buying out US unit Avangrid and allocating its biggest chunk of capex to the States. Both bets look likelier to pay off than renewable power and geographies with less generous subsidies.
RWE has a way out of its valuation hole 14 Mar 2024 The $26 bln German power utility has lost 22% of its market value this year. Low gas prices, higher rates and a lingering presence in polluting lignite are reasons why. The first two ought not to persist as headaches, and the last is something RWE could do more about.
Dead power deal shows limits of M&A futurology 2 Jan 2024 Avangrid and PNM have given up on a $8 bln merger after three years of waiting for regulatory approval. Yet investors repeatedly priced the target as if the tie-up were in the bag. Political twists can easily wrong-foot arbitrageurs. Trouble is, such twists may get more common.
Renewable will increasingly mean mostly solar 7 Dec 2023 Cheap green power is eating coal and gas, but solar's price is falling fast. It isn’t an exact wind substitute, so even costly offshore farms have a future. Texas shows the future, where solar now accounts for 7% of generation and has grown 5 times as fast as wind since 2019.
Double defensive gas deal offers relative cleaning 6 Sep 2023 Canadian pipeline firm Enbridge wants to reduce dependence on transporting oil. Dominion Energy wants to concentrate on clean electricity. Selling retail gas distribution businesses for $9.4 bln to Enbridge doesn’t directly reduce emissions. But it does make both look cleaner.
Climate change turns US utilities grimly exciting 31 Aug 2023 Hawaii’s biggest electricity provider is at risk of bankruptcy after wildfires destroyed a town. Increased capital expenditure can mitigate, but not eliminate, damage from storms and heat. Little wonder investors are slowly waking up to the dangers posed by litigious customers.
GE chief’s efforts pay back twice over 25 Jul 2023 Jet engines and turbines are back in demand after years of weakness when CEO Larry Culp could do little but focus on efficiency. The conglomerate is now equipped for better times. So’s the boss, whose extravagant $232 mln bonus – pegged to the share price – is finally in the bag.
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.
Thames Water’s leaky financials are far from fixed 13 Jul 2023 The privately owned UK water company managed to cobble together a rescue from existing shareholders. But in this Viewsroom podcast, Breakingviews columnists discuss why the fresh funds may not be enough, and the threat of nationalisation hangs over the sector as a whole.
Capital Calls: Thames Water, Bayer 10 Jul 2023 Concise views on global finance: The indebted UK utility secured a pledge from shareholders to cough up 750 mln pounds over the next two years; the German conglomerate could help long-suffering investors by undoing the disastrous Monsanto deal.
UK’s leaky water model faces a growing storm 5 Jul 2023 Thames Water’s financial strife has put privately held UK utilities under the spotlight. The sector’s huge investment needs mean bills have to rise yet further. Politicians are likely to ramp up their scrutiny of shareholder returns, and the model of private ownership itself.
UK water meltdown resurrects bank crisis dilemmas 29 Jun 2023 The government may take over indebted 18 bln pound utility Thames Water. Funding a big potential capital hole via bills and taxpayer cash injections could be as politically toxic as 2008-era bailouts of RBS and peers. But imposing losses on creditors may spark even more turmoil.
Capital Calls: Digital euro, Thames Water 28 Jun 2023 Concise views on global finance: Brussels is in a new push to convince EU member states and the European Parliament to endorse a digital euro; Britain’s Thames Water could be placed into special administration.
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: 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.
UK bailout has energy bosses walking on eggshells 13 Feb 2023 Power suppliers like Centrica took billions of pounds of government cash to help customers pay high bills. That leaves them open to charges they pocketed gains and handed losses to taxpayers. For an industry intertwined with the state, pay restraint is vital to self-preservation.