CSH Talk by Robin Fischer

This talk explores how shifts in renewable energy capacity influence the profitability of power firms in Latin America. We address two key questions:

1. To what extent do changes in renewable capacity affect firm profitability, and how does portfolio composition influence this relationship?
2. What renewable energy adoption strategies do power firms in Latin America employ, and how do these strategies impact their profitability?

We categorize firms based on their portfolio compositions using Dynamic Time Warping and Hierarchical Agglomerative Clustering algorithms. To evaluate the effects on profitability, we analyze panel data from 238 power firms utilizing fixed and random effects estimators and System GMM, a bias-corrected method of moments estimator. Our findings reveal that increasing renewable energy capacity negatively impacts the financial performance of firms with fossil fuel-concentrated portfolios.