Over the prior week the Eagle Global Renewables Infrastructure Index (RENEW) returned 0.9%, in line with the S&P 500 and outperforming the S&P Global Clean Energy Index by 264 basis points. The Eagle North American Renewables Infrastructure Index (RENEWNA) returned 0.7%, in line with the S&P 500 and outperforming the S&P Global Clean Energy Index by 242 basis points.
Source: Bloomberg. Please review disclosure information at the end of this post.
Macro Mash Up
Spain rethinking clawbacks. Press reports suggest Spanish authorities began a round of talks with power companies to rethink its recently passed profit clawback scheme. Major producers and consumers are being asked to provide hedging data in order to prevent clawbacks on low-price bilateral contracts. Enacted in mid-September and slated to run through March 2022, the scheme’s goal is to clawback windfall profits earned by the power sector and use it to help customers offset high energy bills.
Renewable PPAs hits new milestone. There has been 21.5 GW of power purchase agreements (PPAs) signed by the corporate community thus far in 2021, comparing favorably to the 25 GW signed in all of 2020 (2010: 0.10 GW). Cumulatively there has now been 100 GW of corporate PPAs signed globally, a milestone that shows how energy transition is transforming business.
Biden administration issues new solar target. The new target calls for community solar to power five million homes by 2025, representing a 700% increase from current capacity. According to NREL, community solar legislation exists in 21 states though only four states (MN, FL, MA, NY) account for 72% of cumulative community solar capacity.
United Kingdom gets aggressive on renewable goals. British Prime Minister Boris Johnson announced that all of the U.K.’s electricity will come from clean sources by 2035, an ambitious target that comes ahead of the global COP26 climate summit that will be held in Glasgow. The U.K.’s goals now include a commitment to cut carbon emissions by 78% by 2035, which includes a ban on gasoline powered vehicles starting in 2030.
Source: Bloomberg
Renewables Roundup
Arizona Utility PNW receives unfavorable ruling. Last week, the Arizona Corporation Commission (ACC) voted on several key items for PNW’s pending rate case. The ACC voted to lower the authorized ROE to 8.7% (well below the ALJ’s recommended level of 9.15%-9.40%). The ACC also voted to defer a vote on the capital recovery for environmental retrofits on PNW’s Four Corners coal plant. Both actions were viewed negatively by the market.
PG&E takes proactive measures to prevent fires. PG&E announced it plans to shut off power for thousands of customers in Northern California. The planned action is to reduce the threat of wildfires that could be caused by elevated wind levels.
U.K. power supplier bankruptcies loom as prices strengthen. Large European utility E.ON announced it will assume energy supply responsibility for 230,000 customers left by three failed companies in the United Kingdom. Independent gas suppliers have been hit hard in recent weeks due to a surge in wholesale energy prices. These companies have been unable to cover the cost of purchasing energy they promised to supply their customers, resulting in a wave of bankruptcies over the past several weeks.
Breakdown: RENEW Index
Source: Bloomberg
Breakdown: RENEWNA Index
Source: Bloomberg
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