Wall Street’s craving for all-green has put spinoffs back on the record for energy producers. This time around, Europe’s resources are more likely to destroy dirty assets than clean ones.
Renewable energy valuations have risen sharply in the past year, driven by companies ‘commitments to reduce carbon emissions and governments’ increasingly ambitious transition plans. Money flows into ESG investment, which prioritises environmental, social and regulatory criteria, leading to a so-called “greenium” for stocks that come with a green range.
While advanced utility companies such as NextEra Energy, Iberdrola and Enel have emerged as green energy giants, a number of their European competitors are eager to enjoy the greenium as well. One way to offer a clean message to investors is to give individual stock market identities to different parts of their business.
They have been here before: In the late 2000s, many European energy producers listed their renewables industries, selling small promises to outside investors to take advantage of the wave. of stimulation around wind and solar energy. As the market grew through ups and downs, the bulk was reassembled for their major companies.
The difference now is that most facilities have a primary focus on their core industries on renewables and are thinking of generating “legacy” carbon loads. Wind and sun are expected to grow significantly over the next few decades, while plants with coal power, nuclear energy and in some cases even moderate clean gas are being phased out. Even a small percentage of coal-fired power generation can deter ESG customers.