Over the prior week the Eagle Global Renewables Infrastructure Index (RENEW) returned +2.85%, outperforming the S&P 500 by 1.21%. The Eagle North American Renewables Infrastructure Index (RENEWNA) returned +1.12%, underperforming the S&P 500 by 0.53%.
Source: Bloomberg. *Review disclosure information at the end of this post.
Macro Mash Up
Senator Manchin opposed to key provision of Clean Power Plan. With the Democrats’ reconciliation bill still under negotiation, West Virginia Senator Joe Manchin came out against the “Clean Energy Payment Program”, which is designed to reward utilities for using clean energy and penalize those that don’t. Given Manchin’s position as a swing vote on the reconciliation bill therefore makes it unlikely this program will make it into the final package.
Texas regulators order power plants to winterize facilities. The Public Utility Commission at Texas will require power companies to insulate generators and take other winterization measures to protect against freezing temperatures that paralyzed Texas last winter. Last winter a cold snap lasting a week caused blackouts that resulted in over 200 deaths and billions of dollars in economic damage.
Emissions plans for The United Kingdom and Japan (separately) will emphasize nuclear. A major publication reported the United Kingdom’s plan to achieve net zero carbon will rely heavily on nuclear power. Separately, Japan indicated its goal of reducing carbon emissions by 46% by 2030 is based on the restart of 30 of its nuclear reactors.
Australian Prime Minister urges its country to devise an emissions reduction plan. Australia remains one of the few “Group of 20” countries that has not yet committed to an emissions reductions program. Prime Minister Scott Morrison plans to attend the COP26 climate conference in Glasgow, and insisted his country needs an economic plan to succeed in an energy transition world.
Source: Bloomberg
Renewables Roundup
Falck Renewables (FKR IM) will sell controlling stake to JP Morgan-advised infrastructure fund. The deal values the company at U.S. $3 billion, a premium of nearly 30% to its trailing average. The infrastructure fund will partner with Falck to “accelerate its growth plan and reinforce its leadership position in the renewable energy sector”.
Orsted (ORSTED DC) sells 50% stake in offshore wind farm to Glennmont for U.S. $1.4 billion. The asset, Borkum Riffgrund 3, is expected to be commissioned by 2025 following successful bids executed in 2017 and 2018. As part of the agreement, Orsted will construct the wind farm and revenues are supported by long-term power purchase agreements. Glennmont Partners is a wholly-owned subsidiary of global asset manager Nuveen.
Ibedrola (IBE SM) and Endesa (ELE SM) shun renewables auction in Spain. The two major renewables companies declined to participate in the latest auction for new wind and solar energy capacity as concerns continue over the government’s attempts to contain costs during the current energy crisis. Ibedrola, one of the world’s largest developers of renewable energy, indicated previously that regulatory uncertainty is making them reconsider investments in Spain.
Nextera Energy Partners (NEP) to pay $824 million for renewable energy portfolio. The dropdown transaction includes 2,520 MW of newly constructed or in-construction wind and solar assets along with roughly 115 MW of integrated battery storage. Financing will be provided by Apollo Global Management via the issuance of convertible equity.
Breakdown: RENEW Index
Source: Bloomberg
Breakdown: RENEWNA Index
Source: Bloomberg
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