Clean-Energy Stocks Surge as War Spurs Push Away From Russia

(Bloomberg) -- European and U.S. green energy stocks surged as Russia's invasion of Ukraine increases pressure on governments to build more wind and solar power to reduce dependence on imported fossil fuels.

The world's biggest wind-turbine maker Vestas Wind Systems A/S and competitor Siemens Gamesa Renewable Energy SA gained more than 15% on Monday, while Nordex SE rose as much as 21%. Denmark's Orsted A/S, the world's biggest developer of offshore wind farms, gained as much as 11%.

Shares of U.S. renewable energy companies also soared in New York. Sunrun Inc., the top U.S. residential solar company, surged as much as 13%. Enphase Energy Inc. and SolarEdge Technologies Inc., which supply inverters that are needed to install solar systems, both rose more than 9%, making them the two best performers on the S&P 500 Index. TPI Composites Inc., which produces blades for wind turbines, gained as much as 26%.

“There's a realization that Europe has to move away from dependency on Russian oil and gas and one way to achieve that is renewables,” said Deepa Venkateswaran, a senior analyst at Bernstein Autonomous LLP. “Now it's not just about decarbonization, but also about security of supply ”

The Russia-Ukraine war may serve to hasten the European Union's ambitious plans to boost the share of its energy from renewable sources this decade. With projects still stifled by local red-tape, executives for the biggest turbine makers wrote to European Commission President Ursula von der Leyen last week to urge the EU to take action to speed up the permitting process for new wind farms.

The German government on Monday set a plan to get all its electricity from renewable energy by 2035, 15 years ahead of its previous goal for so-called greenhouse-gas neutrality “before 2050.”

While Europe will likely continue to rely on natural gas for years to come, more renewables will lessen the bloc's dependence on the fuel. That could make it easier to source its gas from countries besides Russia, which currently makes up more than a third of Europe's supply.

The gains in renewable energy stocks Monday stood in stark contrast to firms heavily exposed to Russian fossil fuels. Austrian oil and chemicals group OMV AG fell 8% while Uniper SE, which helped finance the new Nord Stream 2 gas pipeline from Russia that may never be used, dropped as much as 9.5%.

“Absent any additional shocks, high fossil fuel prices are likely to drive additional outperformance in decarbonization stocks,” Joe Osha, an analyst at Guggenheim Securities, wrote in a research note Monday.