Sector Update Austrian Utilities - New renewables law, new earnings potential
Following the long overdue publication of the draft of the new renewables law that aims to enable 100% renewables coverage of Austrian power demand by 2030and the EU Commissions push for a 55% reduction of CO2 emissions also by 2030, we have taken a closer look at the potential implications of going full green in Austria and the implications for Austrian utilities. We find that EVN has the biggest local potential for the prime yielding technologies wind and PV, while Verbund lacks the home base and might be encouraged to go ahead with new hydro projects, whose levelised cost (of energy, LCOE) is far from achieving grid parity, i.e. breaking even at current power prices.EVN is an energy and environmental services provider. Co.'s segments include: generation, which is engaged in electricity generation; energy trade and supply, which is engaged in the procurement of electricity; network infrastructure Austria, which is engaged in the operation of regional electricity and natural gas networks; energy supply South East Europe, which is engaged in operation of electricity networks and electricity, and energy trading; environmental services segment, which is engaged in among others, drinking water supply, as well as international project business; and strategic investments and other business segment, which is engaged in strategic and other investments.
Verbund is a public utility company engaged in the generation and transmission of electricity from subsidiaries' hydro and thermal power stations located throughout Austria. Through its subsidiaries, Co. is involved in the planning and construction of water systems, hydroelectric power plants, river structures, sewage disposal systems, and high voltage transmission towers and lines. Co. generates, trades and sells electrical energy to power exchange buyers, traders, energy supply companies and industrial companies as well as households and commercial customers.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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