President-elect Joe Biden’s plans for a clean energy revolution in the United States has seen various renewable related sectors jump in value. ASX lithium shares, Galaxy Resources Limited (ASX: GXY), Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS), for example, have all rallied more than 40% in November. Could this place pressure on Australia to step up its commitment to curbing climate change? On that note, let’s take a closer look at three large cap ASX renewable energy shares that could help lead the charge.
1. AGL Energy Limited (ASX: AGL)
AGL supplies energy and other services to more than 3.8 million consumer accounts. Its electricity portfolio is made up of traditional coal and gas-fired generation combined with renewables such as wind, hydro and solar.
The company is focused on developing a flexible supply of energy and building on its history as Australia’s leading private investor in renewable energy to support the transition to a new energy system.
AGL’s climate statement advises the company aims to achieve 34% of its electricity capacity from renewables and clean storage by FY24. This compares to its current 22%.
Despite the noble intentions of AGL, its share price has struggled in recent years and currently sits at 5-year lows. The AGL share price did not move in tandem with the recent rise in cyclical and value shares. The company does however, generate strong cash flows and currently pays a dividend yield of 7.28%.
2. Tilt Renewables Ltd (ASX: TLT)
Tilt owns and develops an extensive portfolio of wind and solar assets. The company is profitable, and in the first half of its FY21, delivered a 125% increase in net profit after tax of $26.8 million.
Tilt currently has an operational output of 366 megawatts (MW) with 469 MW under construction. The company is also working on two significant projects, the Dundonnel Wind Farm (DDWF) and Waipipi Wind Farm (WWF) which will bolster its operational output to 836 MW post completion of DDWF and WWF.
The Tilt share price is currently near record all-time highs and is up 14% year to date.
3. Origin Energy Ltd (ASX: ORG)
Origin supports the Paris Agreement to limit the the world’s temperate rise. According to Origin, in line with its decarbonisation strategy it plans to:
- Target more than 25% of owned and contracted generation capacity from renewables and stage by the end of 2020.
- Include a new climate change target linked to executive remuneration.
- Aim to achieve net zero emissions by 2050.
The company follows a similar share price and earnings narrative as AGL. The Origin share price was a stronger performing leading into the initial COVID-19 sell-off in March. However, it has struggled in recent months to make a recovery and is currently hovering above 4-year lows.
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Returns As of 15th February 2021
Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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