Another Big Push Into Renewables
This week, we talk about one of the latest big moves from a utility into renewable energy.
Welcome to our weekly chat about the environmental and social issues that influence the way we work, spend our money and live our lives. We're your hosts, Dieter Holger and Dave Sebastian. Want to get our newsletter every Wednesday? Hit the subscribe button in the upper right corner and please share with your friends!
Hi, Dave! We are seeing energy companies continue to move into renewables. One of the latest is an $83 billion bet by Enel, Europe’s largest utility company.
The Italian utility’s spending over the next decade could help cement its place as the largest renewable energy producer outside China and gain a stronger foothold in the U.S. It plans to more than double its renewable capacity to 120 gigawatts from around 45 gigawatts today.
Enel’s CEO says there are “very large” opportunities to grow in the U.S. He says he hopes President-elect Joe Biden, who has proposed a $2 trillion climate plan, will make conditions more favorable.
This is happening after renewable energy overtook coal power in the U.S. last year. The share of renewable sources of electricity is expected to grow to 33% globally by 2025, from 27% this year, according to the International Energy Agency.
But some energy analysts warn that Enel is entering an increasingly competitive market that might not be very profitable given the growing number of players. Now, I heard it was a historic week in the stock market, what happened?
We saw a new record, for one. The Dow Jones Industrial Average jumped past 30,000 points for the first time Tuesday. It’s the latest milestone in a post-election rally after promising results from three potential coronavirus vaccines.
Investors were also encouraged by Biden’s plans to nominate former Federal Reserve Chairwoman Janet Yellen as Treasury secretary because she has supported more federal spending to stoke the economy. Some green investors are pleased with her nomination since she has called for a carbon tax in the past.
What am I looking at? The chart above shows the historic rise of the Dow Jones Industrial Average on Nov. 24 compared with other major market indexes. The Dow represents just 30 stocks, including Coca-Cola and Goldman Sachs, compared to benchmarks like the S&P 500 that contain hundreds of companies. That means the Dow isn’t necessarily the best representation of the broad economy. Each point on the Dow represents dollars based on a ratio that is constantly updated.
Dieter: We’ll see how long it will take to get the Dow to 40,000! Positive vaccine news is injecting cash into emerging market funds, drawing an all-time high of inflows last week. The weaker dollar also boosted investors’ risk appetite. This marks a turnaround for many developing economies that have been shunned during the pandemic.
The rise in oil prices also continued Tuesday, sending crude to its highest level since early March as investors bet on a brighter economic outlook and higher demand for fuel. As a result, energy producers have been the stock market’s best performers in recent days.
We’ll keep an eye on whether the vaccine optimism lasts. Now let’s open it up to our readers: What do you think about energy companies investing heavily into renewables? Or something about the vaccine
Share your thoughts below, email us or catch us on Twitter. Your words could appear in our next edition! Have a great week and remember to wash your hands. 👋
Meet the team:
Elevate the Conversation is produced by the editorial teams of The Wall Street Journal and Dow Jones Newswires. Here's a little bit more about us, along with our contact information. We'd love to hear from you.
Dieter Holger, Reporter: I have a knack for uncovering values-based investing trends and I’m obsessed with spreadsheets and charts. I really enjoy ‘80s music, skateboarding and yoga (but I’m bad at both). dieter.holger@wsj.com @dieterholger
Maitane Sardon, Reporter: I have a passion for amplifying the voices of those at the center of stories. I love running on Barcelona’s beaches and binging on chocolate ice-cream to compensate (it’s all about balance). maitane.sardon@wsj.com @sardonmaitane
Dave Sebastian, Reporter: I'm interested in covering the intersection of business and economic trends—and the people behind them. In my free time, I like to check out dim sum spots in New York, and I can't wait to venture out again after the pandemic. dave.sebastian@wsj.com @depsebastian
Catherine Lindsay, Editor: I like breaking down complex ideas and explaining them. On the weekend, you’ll find me wandering the city with my film camera at the ready. catherine.lindsay@wsj.com @CathsLindsay
Tammy Lian, Designer: As a visual producer, I'm always excited by the challenge of creative problem solving. In my spare time, you can usually find me taking care of my ever-growing collection of plants and drinking tea. tammy.lian@wsj.com @violian.tammy