Renewables stocks have risen again today (8 March 2022) as Bloomberg reported that the EU is looking to issue bonds on a massive scale to fund transformative spending in defence and energy
Clarksons Platou Securities said the EU wants to free itself from dependence on Russian gas. The broker noted that wind turbine producers Siemens Gamesa and Vestas shares were up 5.4% and 3.6%, respectively, and Danish developer Ørsted edged 1.5% higher. The gains follow earlier increases in renewables stocks that took place after Russia invaded Ukraine.
European Commission President Ursula von der Leyen told the European Parliament recently, “Less dependence on Russian gas and other fossil fuel sources means less money for the Kremlin’s war chest.” Germany’s Energy Minister Robert Habeck said, “The expansion of renewables is a question of national and European security,” and the country’s Finance Minister Christian Lindner recently called renewables “freedom energies.”
On 8 March 2022, US President Joe Biden announced a ban on imports of Russian oil, gas and coal, and the UK is said to be set to gradually phase out imports of Russian oil. It is also said to be considering phasing out gas imported from Russia.
“Since Russia’s invasion of Ukraine, large cap renewables have surged 18-36%, driven by expectations of accelerating renewables growth due to Europe’s energy security concerns,” said Clarksons Platou Securities. It noted that Aker Offshore Wind was trading 8.1% higher.
“In part the rally may be short-covering, as the biggest moves are in names with the highest short interest – hydrogen player Nel, for example is the most shorted name on the Oslo Stock Exchange and is trading 11.5% higher.
“Nonetheless, we believe that a fundamental shift is underway as policymakers promote renewables expansion more actively than ever before and interest rates pull back from their highs due to fears of slowing economic growth amid energy supply shocks.”
The broker said other notable moves in coverage include Aker Horizons, rising 7.4%, installation vessel owner Cadeler, moving up 5.4% and developer Magnora rising 4.6%.
“The breadth of the move across subsectors and renewables technologies suggest to us that an investor sentiment shift or even sector rotation could be in its early days,” Clarksons Platou Securities concluded.
In a 7 March press conference, UK Prime Minister Boris Johnson said his administration was working on a new energy supply strategy in response to the situation in Ukraine. The Prime Minister said the government was looking at making more use of the UK’s own oil and gas resources, but was not planning to abandon commitments to renewables and net zero. He also said the UK needed more nuclear and renewables.
In February 2022, Members of the European Parliament set out recommendations on ways to deploy offshore wind more quickly and stressed that meeting already ambitious 2030 and 2050 targets for offshore renewables requires faster deployment of offshore wind.
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