German election inflates green energy stocks
FRANKFURT - Victory for Germany\'s ruling Social Democrat-Green coalition in Sunday\'s election sent renewable energy and recycling firms\' stocks higher this week as investors banked on a continuation of clean energy policies.
Shares in Nordex, which makes wind power generators, surged as much as 29 percent and wind park operator Plambeck jumped 22 percent.
Analysts said many investors feared that a change in government could threaten some of the special incentives enjoyed by renewable energy groups under the current government.
German renewable energy companies are entitled to higher rates for feeding power into the national grid than traditional power generators as part of the government\'s support for alternative energy sources.
\"Clearly, it looks like it will be business as usual. There were some worries that there would be a change and that some of the very high feed-in tariffs could be reduced,\" said James Stettler, analyst at Dresdner Kleinwort Wasserstein in London.
Many German wind energy firms are planning giant offshore wind farms to generate power but sea-based wind farms are expensive and government support is crucial for their success.
\"It is a relief that the Greens have done so well, which means continued support. Germany today is the biggest wind market... and they are obviously looking towards building offshore windparks,\" Stettler said.
Stettler pointed to Denmark, where a change in government had thrown doubt over the construction of further offshore wind parks.
\"Denmark has just finished the first offshore wind farm but the shift to a conservative government has meant that there are question marks over whether further wind farms will be built.\"
In Norway, shares in bottle and can recycling group Tomra jumped as much as 12 percent this week after Schroeder\'s election victory boosted hopes of wider recycling in Germany, dealers said.
Germany is a key market for Tomra\'s machines that accept bottles and cans for recycling while repaying a deposit. Its shares gained on anticipation that Schroeder and his green allies will carry through plans to mandate recycling of non-refillable bottles and cans from 2003.
Analysts expect a continuation of the Greens\' initiatives, such as the agreed phasing-out of German nuclear power plants by the early 2020s, generous subsidies for renewable energy industries and environmentally friendly combined heat and power (CHP) plants as well as environmental taxes on energy use.
Nordex and Plambeck are the biggest of the handful of renewable energy firms listed on Germany\'s Neuer Markt for growth stocks.
Shares in other green energy firms such as Umweltkontor AG, Repower and solar power firm Sunways rose as Schroeder\'s coalition remained in power.
\"It is a clear goal of Schroeder\'s coalition that the importance of renewable energy should increase and this sector profits most from this election,\" said Trudbert Merkel, fund manager at Deka Group in Frankfurt.
Merkel, who saw the value of his 3.5 million Nordex shares jump by as much as 3.6 million euros ($3.55 million) this week, said renewable energy will become more important as traditional energy sources dwindle.
\"Renewable energy will be the big topic in the long-term for solving energy problems. It is clear that oil reserves are running out and you will have to solve this problem.\"
(Additional reporting by Vera Eckert and Alister Doyle in Oslo).
Story by Marius Bosch
REUTERS NEWS SERVICE
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