German energy stocks rise as investors bet on renewables
manager magazin / Handelsblatt
Stocks of German wind and solar park operators had a successful start to 2021 as investors bet on renewable energy and drove up stock prices, reports manager magazin. Encavis’s stocks reached a record high on 4 January, while energy company RWE’s share price reached its highest level in eight years. According to the magazine, the developments can be partly attributed to EU leaders’ decision to increase the bloc’s 2030 greenhouse gas reduction target to at least 55 percent.
Handelsblatt reports that renewables companies can already look back on a successful 2020, despite the coronavirus outbreak. “The pandemic seems to have conjured up the green transition that many have been calling for for years,” writes the newspaper. Markus Krebber, CFO at RWE, said: “With increasingly ambitious climate targets, it is clear that the expansion of renewables must happen even faster.” In a separate article, Handelsblatt reports that for international oil and gas companies, on the other hand, 2020 was “the worst year in their history.” The pandemic led to a collapse in global oil demand and the price of crude oil plummeted in March 2020, sending the industry into crisis. At the same time, pressure to transform is rising in society, the newspaper states: “During the past months, the climate crisis has been almost the only issue that has managed to attract attention with developments like the European Green Deal – despite the pandemic.”
In December, European Union heads of state and government came out in favour of raising the bloc’s climate target significantly and putting the continent on a path towards climate neutrality by 2050. The decision has yet to be finalised in negotiations with the European Parliament, but it is sure to demand massive changes in the European energy systems and puts pressure on market players to transition towards low-emission technologies.