How can renewable energy help solve the UK’s energy crisis?
Chris Tanner, Partner of Foresight Group, Co-Lead Manager of JLEN Environmental Assets Group, said: “A robust infrastructure for domestic renewable energy generation is a key pillar of the UK’s energy security strategy. Having a ‘home-grown’ source of green energy not only reduces the carbon footprint of the entire country, but it also reduces the UK’s overall reliance on foreign energy sources and lessens our vulnerability to geopolitical upheaval of the kind we are currently witnessing.”
Michael Bonte-Friedheim, CEO and Founder of NextEnergy Group, investment adviser to NextEnergy Solar Fund, said: “Enough solar energy hits the Earth in a single hour to power the energy needs of the entire human population for a year, demonstrating that it is an abundant energy source. Solar is also the cheapest form of renewable energy generation and the quickest to construct, therefore placing it in a strong position to rapidly tackle high power prices and energy security globally in a timely fashion.
“By increasing solar generation capacity in the UK, and renewable energy generally, the country will reduce the purchasing of hydrocarbons from abroad and increase its energy independence. Solar generation also contributes to replacing generation from carbon-emitting power plants. The UK government has pledged to increase solar capacity from 14GW to 70GW by 2035, and in a time of energy price uncertainty, solar is going to have one of the biggest and quickest impacts on reaching government goals across both the UK and EU.”
Alex O’Cinneide, CEO of Gore Street Capital, investment manager of Gore Street Energy Storage Fund, said: “Over the last year, we have seen energy prices soar. This has been caused by the rapid increase in energy demand as economies re-opened following Covid-19 lockdowns and exacerbated by the current geopolitical situation in Europe.
“The average price of renewable generation in the UK is now below that of a conventional generator and not subject in the same way to the volatile movements in price that we are seeing. With an energy mix comprising a more significant proportion of renewable energy, we will likely see more consistent pricing and greater energy security.
“However, the inherent intermittency of renewables requires additional flexibility, which until recently has been provided by conventional generation. Renewables cannot produce this flexibility independently, so energy storage systems, such as the utility-scale battery assets operated by our fund, are needed.”
What is your outlook for renewable energy investment companies?
James Armstrong, Managing Partner of Bluefield Partners, investment adviser of Bluefield Solar Income Fund, said: “With sensible government policy, and sensible management of the economy, the outlook for renewable energy should be incredibly positive. Which rational government wouldn’t look to the cheapest, cleanest, most secure and easily deployable options, namely solar and wind, as a central part of their energy policy?”
Alex O’Cinneide, CEO of Gore Street Capital, investment manager of Gore Street Energy Storage Fund, said: “Despite the current volatility in financial markets, the fundamental growth drivers for many renewable energy investment companies remain strong. There is a clear shift toward low-carbon energy generation, and flexible assets are required to enable renewable generation growth. Here in the UK, the government has committed to achieving carbon neutrality by 2050. This mandate provides a tailwind for the deployment of battery energy storage systems and has led to rapid growth within the sector.”
Tom Hovanessian, Director of Sustainable Development Capital, investment manager of SDCL Energy Efficiency Income Trust, said: “Renewable energy remains a key part of the solution not just to the impact of greenhouse gas emissions, but to the energy crisis we are currently facing. Investment companies focused on the sector remain well-positioned to benefit from the value that these solutions will bring, both today and over the long term. Looking at current prices across publicly traded renewable energy investment companies, there may be some attractive buying opportunities.”
Michael Bonte-Friedheim, CEO and Founder of NextEnergy Group, investment adviser to NextEnergy Solar Fund, said: “Investment companies are highly attractive vehicles to hold and grow a renewable asset portfolio, providing investors with the opportunity to fund the expansion of renewable energy in the UK and offering attractive dividends to shareholders. The global solar sector is estimated to grow to 8,000GW by 2050, up from 800GW in 2019. Renewable electricity growth is accelerating faster than ever, which is increasingly powered by clean energy, including solar. This is driven by stronger support from government policies and more ambitious clean energy goals which are set to continue in the coming years.”
