Renewable energy company shares rise after COP21

Shares in renewable energy companies responded to the success of the Paris climate conference and the conclusion of an agreement to limit global warming. REC Silicon, Gamesa and Vestas in particular saw gains. 

A number of European companies strengthened following the Paris climate conference, the first major intergovernmental agreement since 1997, when the Kyoto Protocol was signed. At the conference, participating countries agreed to keep global warming relative to the pre-industrial period to a maximum of 2 °C.

The signing of the climate agreement will support the growing renewable energy sector, which is estimated to be worth $600 billion.

For example, Norwegian company REC Silicon, which processes silicon for use in photovoltaic panels, rose by 10 %.

Shares in wind turbine manufacturers also rose. Denmark's Vestas and Spain's Gamesa gained 5-7 %. Wind turbine manufacturers have been going through a strong period since the start of the year, gaining more than 70 %.

Biofuels technology producer Novozymes gained 1.2 %, Scatec Solar 2.5 % and Enel Green Power 0.7 %.

„The Paris climate agreement will certainly help the renewable energy sector grow, as it will lead to ongoing state investment in renewable energy technologies,“ Andrea Williams of Royal London Asset Management told Reuters. The company itself is considering adding renewable energy shares to its portfolio.

Goldman Sachs also named other companies that could benefit from the success of the Paris COP21 conference, particularly Tesla Motors, SolarEdge and Albemarle, which supplies lithium used in battery production.

Nevertheless, many are warning against buying shares on the basis of the Paris conference, adding that it is necessary to let matters settle. Next year's US presidential election could also pose a problem if it is won by a Republican candidate. Republicans are generally sceptical about climate issues.