Q1 2019: Index Review and Key Clean-Tech Developments

Welcome to our quarterly overview of stock index performance and key developments impacting the state of clean tech.

Nasdaq-Clean Edge Stock Index Performance:

During Q1 2019, Clean Edge’s four major stock indexes were all up. On a total return basis, CELS (U.S. clean energy) was up 14.10%, QGRD (global smart grid infrastructure) was up 12.20%, GWE (global wind) was up 14.68%, and HHO (U.S. water) increased 16.47%, compared to the S&P 500’s 13.65% increase during the quarter. Over the past 12 months (total return basis through the end of March), results were more mixed, with CELS up 4.20%, QGRD down -10.02%, GWE up 1.67%, and HHO up 8.50%, compared to the S&P 500’s 4.63% increase. 

Based on the most recent semi-annual evaluation of the NASDAQ-Clean Edge family of clean-tech indexes, new securities additions (across CELS, QGRD, GWE, and HHO) include:

  • American Superconductor Corporation (NASDAQ: AMSC)
  • Bloom Energy Corporation (NYSE: BE)
  • Livent Corporation (NYSE: LTHM)
  • Nio Inc. (NYSE: NIO)
  • Adesto Technologies (NASDAQ: IOTS)
  • Arcosa (NYSE: ACA), Engie (Euronext Paris: ENGI)
  • Trimble Inc. (NASDAQ: TRMB)
  • Wildan Group Inc. (NASDAQ: WLDN)
  • Primo (NASDAQ: PRMW)
  • Northland Power Inc (TSE: NPI)
  • Pattern Energy Group Inc. (NASDAQ: PEGI)
  • The Renewables Infrastructure Group Limited (LON: TRIG 

Major Clean Tech Developments In Q1:

During the first quarter of 2019, we observed a number of developments and trends impacting the shift toward clean energy, transportation, water, and the grid. They include:

Green New Deal Raises People’s Climate Awareness (and Temperatures)

Other than the Mueller investigation and Brexit, the introduction of the Green New Deal resolution by Democratic Rep. Alexandria Ocasio-Cortez (AOC) resulted in more news coverage than just about anything else during the quarter. While it’s too early to know how this will all play out, one thing’s for certain, the Green New Deal has brought climate change and potential solutions to the fore. To learn more about the Green New deal, check out this FAQ/overview from NPR's interview with AOC.  And for additional context, check out our own analysis here, this column from Amy Harder at Axios, and this in the Washington Post.

Indeed, it seems just about everyone has a climate “plan” (even the right). Here's an overview of a number of them. And outside of the U.S., the country of Costa Rica, already a clean energy leader, has its own Green New Deal championed by its First Lady (and urban planner) Claudia Dobles, which extends across transportation, ag, and more.

RE Competes with Coal

Another major trend this quarter (not surprising to anyone closely tracking the RE sector) was the plethora of news around the end of coal in an era of increasingly cost-competitive solar and wind. For example, this piece in Forbes highlights how new Chinese solar plants are now undercutting the cost of coal power. And it’s spreading across Asia. For example, India’s renewable rush has put coal on the back burner, with 74% Of India's new power capacity additions in 2018 coming from renewables, including solar with a total capacity of 8.9 GW and wind with a total capacity of 2.2 GW. And as Japanese investors and corporates increasingly back renewables, a number of energy analysts are predicting that the end of coal in Asia may be in sight.

Similarly, utilities in the U.S., even in more conservative bastions, are transitioning to RE from coal sooner than planned. These include utilities in the Midwest such as Xcel and also in Michigan, where utilities increasingly see coal as inefficient. In Texas, the grid operator reports that the fuel mix is now 30% carbon free. And across the Atlantic in Europe, renewables overtook coal as Germany's main energy source for the first time, accounting for just over 40% of electricity production

Getting to 100 Commitments Climb Among States

While we have covered the amazing growth in corporate RE activity, we’ve also reported how states are beginning to play a more significant role. Late in the quarter, New Mexico’s Governor Michelle Lujan Grisham joined Hawaii and California by approving 100% renewable energy legislation for that state. And while it’s not a done deal yet, Illinois also wants to go all-in on clean energy with its own 100% RE legislation. We expect to see a growing number of states make their 100% RE targets official. And while not a state, utility Idaho Power is targeting carbon-free electricity by 2045 -- further proof that moving to clean energy isn’t a Blue State or Red State issue.

M&A Watch

During the quarter, we witnessed a number of M&A announcements, including many from more established oil & gas, auto, and utility players. Highlights include:

  • Daimler Trucks buys a majority stake in self-driving tech company Tork Robotics https://tcrn.ch/2I4g4yB 
  • Hyundai and Kia Motors put $300 million into India's Ola Cabs to develop electric vehicles, charging networks, and advanced mobility for the Indian market http://ly/2FqlqT3
  • National Grid to acquire Geronimo Energy for U.S. RE development http://bit.ly/2FnsYpH 
  • Oil companies and utilities are buying up EV charging startups at a rapid pace. As cars move from internal combustion engines to electric, they are looking for a piece of the action http://ly/2EGzuGr
  • AEP to acquire 724MW US wind portfolio from Sempra Renewables in deal with more than $1 billion http://bit.ly/2N5Fs7s 
  • Tesla announces acquisition of publicly traded energy storage company Maxwell Technologies http://ly/2U3WcPe
  • Wind giant Vestas reportedly seeking to take control of India's Suzlon http://bit.ly/2Er7mbj 
  • Major Shell acquisition: home battery/EV charging company Sonnen http://ly/2DSGFej
  • During the quarter, Shell (via its ventures arm) also invested in self driving vehicle startup Aurora (along with Amazon and others) in $530 million Series B round as it eyes EV market opportunities https://cnn.it/2WHaUNE 
  • Startup WiTricity acquires Qualcomm’s Halo in hopes of accelerating wireless charging for electric vehicles http://ly/2tePAlh
  • A look at Chevron’s dip Into clean energy investing compared to other oil majors http://ly/2Usba1d  
  • Toyota and Panasonic to create an electric car-battery spinoff company as Toyota makes a firm bet on electric vehicles https://reut.rs/2CDvdTa 

Disclaimer:

The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular financial product or an overall investment strategy. Clean Edge, Inc., does not make any recommendation to buy or sell any financial product or any representation about the financial condition of any company or fund.