What Can High Oil Prices Do for Clean Energy ETFs? | ETF Trends

The ALPS Clean Energy ETF (ACES) gained 4.3% last week, driven by speculation of tough sanctions on Russia for its war with Ukraine that will further tighten the global oil supply.

Crude oil briefly touched $100/ barrel last week — the first time in seven years — and prompted clean energy names to be bid up as the alternative to pricey fossil fuels, according to ALPS.

Renewable Energy Group Inc. (REGI, 2.70% weight), a bioenergy holding in ACES, soared over 31% last week on reports that Chevron (CVX, not in ACES) will buy the green biodiesel maker for $3.1 billion. 

REGI’s proprietary biodiesel process that turns plant-based feedstock into fuel has driven major oil refiners to convert a number of plants into biorefineries. The speculation fueled other bioenergy names in ACES like Green Plains Inc. (GPRE, 1.95% weight) and Aemetis Inc. (AMTX, 0.42% weight) to double-digit gains last week, according to ALPS.

Russia’s invasion of Ukraine last week also provided a boost to solar and wind holdings in ACES, as European natural gas prices rose nearly 60% at one point last week due to its dependence on Russian gas.

Sunnova Energy International (NOVA, 2.00% weight), a solar holding in ACES, gained over 15% last week after reporting inline Q4 earnings, despite Omicron delays, while maintaining its 2022 guidance. The U.S. solar battery storage company added 87,900 new customers in 2021 to reach a total install base of 195,400, indicating increasing battery attachment rates within solar systems, according to ALPS.

Wind company Boralex Inc. (BLX CN, 3.58% weight) rallied over 10% last week after announcing a sale of a 30% stake in its renewable energy assets in France to Swiss investment manager, Energy Infrastructure Partners — the second deal last week with major fossil fuel companies buying into clean energy businesses, according to ALPS.

In addition to ACES, there are many other funds that will provide exposure to clean energy, including the SPDR S&P Kensho Clean Power ETF (CNRG), the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN), and the iShares Global Clean Energy ETF (ICLN).

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