New Energy World™
New Energy World™ embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low-carbon technologies.
What’s on the horizon for renewable energy investment?
22/2/2023
8 min read
Feature
Investment analyst William Judd looks at the prospects for renewable energy source investments following a bumper year in 2022, concluding that the fundamentals of renewables are too strong for global interest rate rises to have a serious long-term negative effect.
The need to abate the climate crisis and to decarbonise our electricity generation systems has spurred a boom in renewable energy developments in recent years. The sector has moved from being a nascent area to one of the energy industry’s primary areas of investment and financing. A growing understanding of renewable energy technologies and their progressively sophisticated offtake arrangements, falling costs with technology advances and an ever-growing political will, have all facilitated deployment of a rising quantum of capital into the sector to meet ambitious climate targets.
There are multiple nuances to any discussion of renewable energy investments and financing. Here we focus on the macro-trends for core renewables – solar photovoltaics (PV), onshore and offshore wind, battery storage – in developed markets.
Despite falling returns as the energy industry has matured, new players have continued to enter the market. Investors have broadened from specific renewable developers to utilities and independent power producers (IPPs), institutional investors and, more recently, insurers.