Renewables sector shares powered by bets on faster energy transition


MILAN, Feb 28 (Reuters) - Shares in European renewables companies rallied in turbulent markets on Monday on bets that the region would accelerate transition towards alternative sources of energy as governments seek ways to reduce reliance on Russian gas imports.

Shares in Nordex (NDXG.DE), Vestas Wind (VWS.CO), Siemens Gamesa (SGREN.MC), Orsted (ORSTED.CO) and EDP Renovaveis (EDPR.LS) rose by between 5% and 12% as investors sought bigger exposure to the sector ahead of top-level discussions in Europe on energy security.

German Chancellor Olaf Scholz on Sunday called for faster expansion of renewable energy after his country halted the $11 billion Nord Stream 2 gas pipeline project following Russia's invasion of Ukraine. read more

"Policy changes in Germany and the spike in natural gas prices following recent events could now lead to a step change in how Europe, especially Germany, accelerates renewable energy plans that are currently behind schedule in many countries," Citi analysts wrote in a note on Monday.

Vestas and Nordex, the two largest suppliers in German wind turbines, could see 2026 revenue estimates upgraded by high single-digit and mid-teen percentage figures respectively if Germany were to meet its ambitious wind energy expansion goal, Citi said.

Italian Prime Minister Mario Draghi last week said that Italy must reduce its reliance on gas imports from Russia by boosting U.S. imports. He warned that it might be necessary to reopen coal-fired power stations but said that renewables are key in the longer term.

German and Italian companies are highly reliant on energy imports, making them particularly vulnerable to the spike in gas prices caused by the conflict in Ukraine.

Renewables, hydrogen and nuclear will become even more crucial to European energy policy, said Equita analyst Roberto Letizia, referring to the EU system that aims to make green activities more attractive to investors.

European Union energy ministers are to discuss on Monday preparations for potential energy supply shocks and measures to shore up gas stocks in a plan that could also include measures to facilitate faster expansion for renewable energy. read more

Europe's wind power trade association last week called for more permits to build wind farms, saying projects had been slowed by bottlenecks in the granting of permissions. read more

Reporting by Danilo Masoni Editing by David Goodman

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