Breakingviews

Elon Musk plugs Tesla valuation into the grid

May 1, 2015

The Silicon Valley billionaire’s new home battery system is, like his electric cars, too pricey for many. But if costs keep falling, Tesla’s Gigafactory runs smoothly and the solar market expands, shareholders may find there’s more spark in batteries than vehicles.

China SOE fusion could topple cult of competition

April 28, 2015

A mooted $569 bln merger between Sinopec and PetroChina looks a step back for reform and efficiency. But competition between state-backed firms isn’t always helpful. A more demanding shareholder, pricing power and superior regulators could be better spurs to improve performance.

China’s road to West is paved with bold intention

April 20, 2015

President Xi Jinping is expected to sign off on a $46 billion corridor between Western China and Pakistan. The transport link may end up as a security nightmare. But the lure of bringing Europe closer and countering India’s clout in South Asia makes it a tempting idea.

Royal Dutch Shell and BG open mega-deal pipeline

April 8, 2015

The $200 bln energy giant is in advanced talks to buy its $46 bln gas rival. It could be an opportunistic move for Shell, whose vulnerable target has a new CEO. There could yet be other suitors for BG. Any deal is also bound to kick off other big transactions in the sector.

Obama’s nuclear gift to Modi is shrewd investment

January 26, 2015

The U.S. president has unblocked a stalled nuclear power deal with India, allowing Prime Minister Narendra Modi to build new reactors. While that will boost orders for GE-Hitachi and Westinghouse, bigger gains to the U.S. economy will come from ending India’s energy deficit.

Petrodollar drought is new risk for markets

January 6, 2015

Low oil prices are not only a blight for energy producers. They could hurt global financial markets too. After years of surplus petro-earnings gushing into a range of assets, notably fixed income, the flows are at risk of reversing. The sharp equity market fall may be a first sign.

Crude slump will stoke European oil and gas M&A

January 2, 2015

The sharp drop in the price of Brent might make it harder to get deals done in the short term. But if the downturn persists, financial distress will put some small players in play. Larger, more defensive mergers, designed to create value by sharing costs, are also possible.

UK faces risk of cold-weather blackouts

December 30, 2014

Britain’s electricity system is ageing and the mix of generating technology is changing. Both factors increase the danger of power cuts at peak times. Contingency plans include paying companies to accept temporary grid outages. New capacity can’t come soon enough.

Solar upstarts and utilities head for uneasy truce

December 16, 2014

The soaring popularity of solar panels in the U.S. cuts carbon emissions but upsets utilities trying to make a return on grid investments. The industry’s attempts to slap fees on solar users sparked uproar in 2014. A new cost-sharing approach may take the heat out of the debate.

E.ON’s “bad power” spinoff promises little upside

December 1, 2014

Germany’s largest utility is exiting conventional generation, bundling unwanted risk into a new company to be handed to shareholders. E.ON can concentrate on distribution and clean electricity. Both managements will benefit from focus. Still, the new entity’s prospects are bleak.