Renewable Energy Investment Opportunities RE100

Renewable Energy Investment Opportunities

Renewable energy needs investments of $100B just to support commitments by RE100, according to the latest analysis by Bloomberg New Energy Finance (BNEF). Download New Energy Outlook 2019. RE100 companies committed to offset 100% of their electricity demand from green sources.

The 191 signatures of the RE100, including Apple, JP Morgan Chase, and Lyft, currently meet around 39% of their electricity from clean renewable energy. To reach 100% will require an additional 94GW.

Renewable Energy Investments Surge

Energy presents an opportunity for investors. $13.3T needed in new power generation assets from now to 2050. Green bonds, as an asset class, grew from nonexistent to a $600B market in just over a decade

  • 77% renewable energy
    • Wind attracts $5.3T
    • Solar $4.2T
    • Fossil fuel $2T
    • Batteries $843T
  • We will move from 2/3 fossil fuels in 2018 to 2/3 zero-carbon energy by 2050. Therefore, wind and solar will supply 50% of world electricity by 2050, ending the era of fossil fuel dominance in the power sector.

Global Power Generation Mix

Renewable Energy v High Cost of Carbon

High carbon emissions face mounting financial headwinds. The price of a carbon permit in the EU, the world’s largest cap-and-trade program, is up 243% since the start of last year at $26.7, having hit a record $29.8 in late July. Insurance premiums rise for coal. Chubb followed the lead of European insurers, such as Axa and Allianz. On July 1 Chubb said it will no longer offer coverage to utilities with more than 30% of their output from coal-fired plants.

Between 2009 and 2017, prices of solar panels dropped 76% and wind turbines 34%. They are now competitive with, or cheaper than, fossil fuels in most major markets. Wind and solar will supply almost 50% of world electricity by 2050, ending the era of fossil fuel dominance in the power sector. Solar alone will rise from 2% to 22% by 2050.

A good portion of the above came from UBS, which believes clean energy offers potential for long-term investors. Previous related posts.

   

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