The bounce that the election of Barack Obama has brought to America was reflected in a soar in the price of green energy stocks.
Solar Integrated Technologies rose by 30 per cent the day after the election, following increases of 22 per cent by Renewable Energy Corporation and 16 per cent by the wind turbine maker Vestas in the 24 hours before, when they were helped upwards by oil prices returning to above $70 a barrel.
{pagebreak}
Obama has promised to invest $150bn over 10 years in renewables as part of a wider plan to increase US energy security amid fear of oil shortages, while also reducing the country’s carbon emissions in a bid to tackle global warming – and create jobs during an economic downturn.
Kate Hampton, head of policy at Climate Change Capital, welcomed the poll result as a massive step forward for renewables.
“We cannot overstate how divisive the Bush administration was, how far behind the US now is in the transition to the low-carbon economy and how high expectations are now that Obama is the president-elect,” she said.
Dean Cooper, alternative energy analyst with Ambrian Partners in London, predicted widespread change in the US with production tax credits for the wind industry increased from one year to seven years and a national renewable-energy guideline introduced alongside a cap-and-trade scheme to give more certainty on a carbon price.
The US election result has provided a much-needed boost at a critical time for an emerging investment sector that risked being crushed by the banking crisis and emerging economic recession. Some companies had seen their share prices halve in the turmoil that began in September.
“Since the onset of the most recent phase of the credit crisis, the European wind sector has been battered with an unweighted average decline of 45% compared to a decline of 23% for both the S&P 500 and FTSE Eurofirst 300 over the same period,” said Michael McNamara, analyst at Jefferies & Co, in a research note published at the height of the sell-off.
“Much of this has been linked to fears that wind power developers would see themselves cut off from access to financing due to a toxic combination of a potential global closure of the project finance market and a drying up of demand for tax equity investment in the US.”
