Two of the world’s biggest renewable energy operators have been swept up in a crackdown on coal investments by the world’s largest sovereign wealth fund.

Germany-based RWE has been excluded from investments by the $1 trillion Government Pension Fund Global in a decision that enacts new criteria drawn up by Norway last year.

Italy’s Enel has been placed under ‘observation’ by the fund, which invests the massive proceeds of Norway’s oil and gas-based wealth on behalf of the country.

The directives covering miners and power producers include deriving 30% or more of income from thermal coal, or having a coal-based capacity of more than 10GW.

RWE will later this year become one of Europe’s largest producers of green electricity following a complex asset-swap deal with fellow German group E.ON. But the group has faced heavy criticism over the extent of its legacy coal and lignite operations that still form a huge chunk of its profits, and the speed of its plans to change.

RWE has been contacted by Recharge for comment. In a quarterly results statement today the company said: “To achieve its goal of being carbon neutral by 2040, RWE is resolutely and responsibly phasing out electricity generation from coal.”

Italy-based utility Enel is a massive force in global renewables with plans to hit more than 60GW of green capacity by the end of 2022, up from 46GW now, under its latest strategic update published in late 2019.

The Italian group has stressed its plan to move decisively from coal to renewables, a strategy that was earlier this year flagged as a boost to its creditworthiness by S&P Ratings.

Enel told Recharge in a statement: “During the Capital Markets Day held in November 2019 Enel announced a plan to phase-out coal, which implies further reduction in coal capacity and production, the latter – having reduced by almost 60% from 2012 to 2019 – being expected to decrease by a further 55% by 2022.

“In particular, coal capacity was 11.7GW in 2019 and is expected to go down to 6.6GW in 2022,” said the Italian group, adding that coal was 3.5% of group revenues in 2019.

It added: “As a result of its commitment to decarbonisation and coal phase-out, as announced in September 2019 Enel set a new emission target for 2030, consisting of cutting down by 70% CO₂ emissions per kWh by 2030, compared to 2017. This target is consistent with the well-below 2 degrees pathway of the IEA.”

Other companies excluded by the Norwegian fund include miner Anglo-American, petrochemicals group Sasol and commodities giant Glencore.

Transition

Renewables giants RWE and Enel swept up in coal crackdown by world's biggest wealth fund