A few things to know about renewable energy investing

 

Policy uncertainty is one of the biggest obstacles to investment in renewables: Many Governments are still failing to take up the challenge and lead the way on renewables, despite the EU Renewable Energy Directive, which requires the EU to fulfil at least 20% of its total energy needs with renewables by 2020. Some countries are well on their way to meeting these targets, while others will face large fines if they don’t put policies and measures in place to achieve the goals by 2020. One country that is putting measures in place to meet those targets is the UK. For example the UK Government doesn’t directly subsidize the construction or operation of ‘Energy for Waste plants’ (a form of renewable energy production), however they do provide indirect support for EfW via its Clean Growth Strategy. The strategy targets zero avoidable waste going to landfill by 2050.

Solar and Wind are cheaper than you think: Despite a common investor assumption that renewables are expensive, “this stuff is really cheap”, said Bloomberg New Energy Finance’s Jenny Chase. There are plenty of places where Solar, Wind and EfW make economic sense, provided investment conditions are right. Going back to the UK, dumping landfill is prohibitively expensive, at a minimum of just under £100 per tonne, £88.85 of which is government tax. Apart from landfill, the only other option available for black bin waste processing in the UK is combustion either in the UK or abroad. High costs are now driving waste disposal companies to come up with sustainable ways of managing waste, using projects such as the ‘Energy for Waste’ project.

There’s a long way to go: There have been leaps and bounds in terms of innovation and affordability, which have helped renewables to become an attractive investment opportunity. For example when looking at affordability, Solar Panels are now selling for less than a quarter of their 2008 price. But if we are to reach the kind of levels required for a meaningful energy transition, there’s a lot more that needs to be done. Investors should continue to view renewable energy investment opportunities open mindedly in order to tap in to some of the some of the great investment opportunities that exist.

2018-09-25T11:01:13+00:00 September 25th, 2018|