Morgan Stanley |The climate legislation in the US is improving the profitability outlook for investments in clean energy, since countries are competing for capital and accelerating the new energy ambitions in the wake of the global energy crisis.
Previously, the US was the top destination for capital. However, the gas crisis in Europe has changed the preference for assignation of capital of those companies in our coverage:
a: 1) Europe, 2) US, 3) Other DMs and 4) EMs
This new preference for Europe is based on the benefits which high energy prices imply for returns, and on REPowerEU’s ambitious targets in the face of the need for greater energy security. That said, our stocks with greater exposure to US Clean Energy, and thus benefitting more than the rest, are Orsted, RWE and Iberdrola.