Summary
⚈ Spain’s power outage affected 60 million people but barely moved the IBEX 35 index.
⚈ Energy stocks like Endesa and Iberdrola rose, aided by their outage response efforts.
⚈ The event could boost support for renewables and natural gas as grid stabilizers.
Spain’s power outage on April 28 saw roughly 60 million people on the Iberian peninsula and parts of France left without electricity for nearly 18 hours.
By press time on April 29, the situation had mostly returned to normal—although the exact cause of the outage has not been ascertained yet.
Surprisingly enough, Spain’s power outage had a muted effect on the country’s stock market. The IBEX 35 benchmark index actually closed 0.03% higher on the day of the outage, although it has since fallen to levels 0.72% below what they were preceding the blackout.
Stock trading was not suspended during the blackout, as major exchanges remained operational.
With that being said, a look at the IBEX 35 might not provide an overview that is granular enough. Since we’re discussing a power outage, it’s only fair to take a closer look at how some of Spain’s most important publicly-traded energy and utility companies reacted to the disruption.
Spain’s national power company, Red Eléctrica (BME: RED), saw its stock close 0.31% higher on the day of the ‘apagón’, although RED shares have since dropped to levels 0.47% below those seen before the outage.
Power companies, however, fared significantly better. Renewable energy leaders Endesa (BME: ELE) and Iberdrola (BME: IBE), which were critical in restoring power, have seen the price of their shares increase. To be precise, ELE stock is trading some 1.98% higher than it was before Spain’s power outage, while IBE stock has risen by 1.49% in the same timeframe.
Lastly, even power companies that are not as involved in renewable energy have benefited. Naturgy Energy Group (BME: NTGY) maintains a small renewable portfolio, but is primarily a natural gas company. NTGY stock has seen a 0.92% surge in the aftermath of the outage.
In a perhaps surprising turn of events, Spain’s power outage could serve to increase demand and renew calls for a more stable, resilient grid. Renewables and natural gas companies are well-positioned to benefit — the former from subsidies, strong demand, and increasing affordability, and the latter in the form of being a sympathy play, as natural gas complements renewables by providing stable baseload power.
Featured image from Shutterstock
