Over the prior week the Eagle Global Renewables Infrastructure Index (RENEW) returned +2.39%, outperforming the S&P 500 by 57 basis points and underperforming the S&P Global Clean Energy Index by 476 basis points. The Eagle North American Renewables Infrastructure Index (RENEWNA) returned +3.76%, outperforming the S&P 500 by 194 basis points and underperforming the S&P Global Clean Energy Index by 340 basis points.
Source: Bloomberg *See performance disclosure information at the end of this post.
Macro Mash Up
Germany aiming to exit coal by 2030. The three parties seeking to form a coalition government following recent German elections agreed in preliminary talks to accelerate the phaseout of coal to 2030. This would be an acceleration from the previous plan that called for a coal phaseout by 2038. It appears this will be largely achieved by a more rapid expansion of renewable energy, including designating 2% of Germany’s land for wind power and mandating rooftop solar installation. Coal accounted for roughly 24% of electric generation in 2020 (45% in 2013).
French government to support modular nuclear reactor development. State-controlled utility Electricite de France SA (EDF FP) will get support from the French government in their push to develop and export small modular nuclear reactors by 2030. This coincides with France’s push to convince the E.U. that nuclear energy should play a role in energy transition given its negligible carbon emissions and despite the reality of its toxic waste.
Asia sees gas-to-fuel oil switching on account of soaring natural gas prices. Several Asian countries are increasingly turning to fuel oil as an alternative to natural gas prices on account of affordability. While likely short-term in nature, this represents an environmental regression given natural gas emissions are significantly less than fuel oil.
Russia targets 2060 for carbon neutrality. Russia joins China in pledging carbon neutrality by 2060, a decade later than most other large economies that have pledged carbon neutrality by 2050. However, the announcement came as a surprise given Russia’s lack of action to date, as well as it being among the world’s largest oil/natural gas producers and the fourth largest greenhouse gas emitter.
Spanish government to soften recently passed earnings clawback measure. The measure passed last month was effectively a windfall tax on power firms to help combat the recent rise in energy prices. Following intense pushback from power companies and claims investment would fall sharply the Spanish government reconvened to soften the measure and (possibly) ensure it will be temporary.
Source: Bloomberg
Renewables Roundup
Centrica (CNA LN) postpones analyst day due to energy crisis. The company, which owns British Gas, said uncertainty related to the unprecedented commodity price environment led to its cancellation, stressing their focus is on managing the company through surging power and gas prices in the United Kingdom. Several smaller British suppliers have collapsed over the past month, and there are rumors that others may follow.
German utility E.ON (EOAN GR) temporarily suspends new natural gas supply contracts. The ongoing energy crisis in Europe and the sharp increase in procurement rates has led the company to review how it prices natural gas supplies in the wake of soaring wholesale rates.
TransAlta Renewables (RNW CN) suspends operations at Kent Hills Wind Facility. A single tower failure at this wind farm led to the suspension of operations at Kent Hills 1 and Kent Hills 2 as a precautionary measure. The affected areas represent 150 MW’s of the facility’s 167 MW total and have been operating for over ten years. There is currently no estimate as to when the facility will restart operations.
Plug Power (PLUG) partners with several companies to promote hydrogen planes. The hydrogen company revealed it has invested in Airflow, an aerospace company building next-gen electric aircraft. The partnership will work on co-developing and certifying a hydrogen fuel propulsion system. Also, PLUG separately announced a partnership with European plane manufacturer Airbus to evaluate the viability of a hydrogen-powered airplane.
Breakdown: RENEW Index
Source: Bloomberg
Breakdown: RENEWNA Index
Source: Bloomberg
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