Energy-efficiency companies are the “stand-out” winners after Japan’s atomic-power disaster that resulted from the March 11 earthquake and tsunami, Impax Asset Management Group Plc Chief Executive Officer Ian Simm said.
Rising oil prices, political unrest in countries from Libya to Bahrain and Germany’s retreat from nuclear energy after Tokyo Electric Power Co.’s Fukushima Dai-Ichi suffered a reactor meltdown have boosted interest in environmental markets, a sector that includes efficiency, renewable power and water management, Simm said today in a telephone interview.
“Energy efficiency is probably the stand-out winner,” Simm said. “The payback periods on investments reduce significantly as the oil price goes up. The logic is that everybody has an incentive to save money when oil is over $100 a barrel.”
The FTSE Energy Efficiency Index has risen 33 percent in the past year, outstripping a 20 percent gain in the Standard and Poor’s 500 index. The takeovers of Landis+Gyr AG by Toshiba Corp. and of Telvent GIT SA by Schneider Electric SA are “very strong signals” that companies whose products cut energy use in factories, homes and vehicles are attractive, said Simm.
Schneider, the world’s biggest maker of low- and medium-voltage electrical equipment, yesterday agreed to buy Spain’s Telvent for about 1.4 billion euros ($2 billion). Japan’s Toshiba last month said it will pay $2.3 billion for Swiss electronic-metering company Landis+Gyr.
Schneider, Zurich-based ABB Ltd. and Siemens AG in Munich all stand to benefit from Germany’s May 30 decision to shut its nuclear-power plants by 2022, Simm said. That’s because of improvements that will be needed to the electricity grid in Europe’s largest economy, he said.
"Taking a large percentage of baseload power off the German system within 10 years is going to require a quite significant policy change to reduce energy consumption,’’ Simm said. “The biggest beneficiary in the short term will be energy efficiency. There will be benefits for anybody in the grid industry."
Impax, which invests in renewables, waste treatment and water, today said assets under management increased 30 percent to 2.36 billion pounds ($3.86 billion) in the six months through March 31. The shares rose 1.6 percent to 64.75 pence in London, the biggest gain in 10 weeks.
The company’s 380 million-pound Impax Environmental Markets Plc investment fund has returned about 6 percent over the past year.