Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
China’s top battery makers have gained more than $70bn in market capitalisation since the US and Israel attacked Iran, highlighting investor expectations of a long-term boost for clean energy.
Shares in CATL, BYD and Sungrow, which produce batteries and energy storage equipment, have outperformed global oil majors such as Chevron, ExxonMobil and BP since the war began.
The surge in clean energy shares illustrates how China and other oil importers may respond to the war by investing more in renewables in order to boost their energy security.
Neil Beveridge, who leads Bernstein’s energy research, expects China, the world’s biggest oil importer, to double down on its plan to “electrify everything”. Other large Asian economies, including Japan, South Korea and Taiwan, may also seek out clean energy and fuels.
“This totally changes the whole energy paradigm,” he said, adding: “Even if the war ends next month . . . there is no going back.
CATL’s China-traded shares have risen by 19 per cent; Sungrow is up 19.4 per cent; and BYD, also the world’s top EV maker, has gained 21.9 per cent since the US-Israeli strikes were launched at the end of February.
That compares to share price increases of 15.2 per cent for BP, 8 per cent for Chevron, 8.3 per cent for Shell and 4.7 per cent for ExxonMobil. The oil companies have benefited from a 47 per cent rise in oil prices over the same timeframe.
Electricity grids need batteries for storage as they rely more on renewables, which produce power intermittently. Batteries are also essential to support energy-hungry data centres.
The value of just the domestic Chinese market for grid-scale battery storage is forecast to surge to $199bn by 2032, from $48bn last year, according to Mobility Foresights, a research group.
Li Shuo, director of the China Climate Hub at the Asia Society Policy Institute, pointed out that recent attacks on liquefied natural gas infrastructure in the Gulf highlight the “inherent risks of fossil fuel dependency”.
“East Asian countries most reliant on imported LNG will soon face an immeasurable economic shock, despite their distance from the conflict,” he said, adding that developing countries “would be wise” to invest in heavily in clean energy and transport to shield themselves from such geopolitical shocks in the future.
Additional reporting by Haohsiang Ko in Hong Kong
Credit: Source link
