European power companies at risk of huge debts due to climate inaction
10 September 2021
Researchers at the University of Oxford and University College Cork found that a significant majority of large power companies in the UK and EU could have the financial resources to close their fossi fuel power plants early. But by delaying measure by just five years, the researchers predict that fourteen of the twenty-nine companies analysed would suffer a decline in credit ratings related to having enough money to pay interest payments on loans. Credit ratings fell for twelve companies based on having less money available to pay back their loans, including one which was rated as high risk.
The new paper was co-authored by Ben Caldecott, who said, “To avoid negative impacts on share prices, credit ratings, and financial returns, we find that European power companies should increase spending on green technologies early on, to generate new income streams that will mitigate future stranded fossil fuel assets.”
Photo by Jan Huber on Unsplash