RUS | ENG | All
Enter the email or login, that you used for registration.
If you do not remember your password, simply leave this field blank and you will receive a new, along with a link to activate.

Not registered yet?
Welcome!

2020-09-01 14:45:00

RENEWABLES NEED INVESTMENT $2.55 TLN

RENEWABLES NEED INVESTMENT $2.55 TLN

REVE - August 30, 2020  - The energy transformation is unstoppable. Renewable energy capacity additions have consistently outpaced the growth of traditional forms of energy over much of the last decade and in what has been dubbed the ‘decade of action’ the next 10 years are poised to be even more transformational. They will need to be.

To put the world on track to meeting Paris Climate and Sustainable Development Goals, the world needs to more than double the share of global energy supplied by renewables. By 2030, 57 per cent of total power should be renewable – a figure that rises from 26 per cent in 2019. A doubling of annual investment in renewables from around USD 300 billion per year to well over USD 700 billion per year will need to take place, with a total of USD 22.5 trillion of energy sector investments made by 2050.

To achieve the acceleration necessary, all available sources of capital will need to be activated. And with institutional investors representing one of the largest capital pools–USD 100 trillion globally in securities, real property assets, insurance, pension funds and sovereign wealth funds–in the world, they can be an indispensable part of the ongoing transition to a sustainable, low-carbon economy.

"Renewable energy assets provide institutional investors with relatively strong, stable, long-term 'bond-like' returns that match such investors' long-term liabilities, while minimising the risk of stranded assets"

The International Renewable energy Agency’s (IRENA) brief, Renewable Energy Finance: Institutional Capital, summarises the current state of institutional investment in renewables and actionable recommendations to scale them up. Institutional investment in renewables-focused funds is estimated at about USD 6 billion per year. Despite a growth in the number of direct renewable energy projects involving institutional investors, they represent only around 2 per cent of the total renewable project investments in 2018. This means that the potential of institutional capital in renewable energy remains largely underutilised.

Institutional assets are often managed very conservatively, especially in the case of emerging and developing markets. Renewable energy assets provide institutional investors with relatively strong, stable and long-term ‘bond-like’ returns that match such investors’ long-term liabilities, while minimising the risk of stranded assets. The figure above shows that institutional investors have strong preference in utility-scale solar PV and wind projects, due to the proven technologies and large transaction sizes.

With only 1% of the USD 85 trillion managed by 5800 institutional investors going directly to renewable energy projects in the past two decades, there is a lucrative and huge market gap that renewable energy could fill. This is particularly befitting with the current situation when the heightened unpredictability of oil investments returns make the business case for renewables even stronger. Not only can renewables meet institutional capital’s needs for more stable yields and better asset diversification, they can also meet the needs of a growing number of environmentally conscious investors and shareholders, who understand that countries need to achieve their climate goals with energy transformation.

Institutional investors new to renewable energy have the option to fund renewables through instruments that serve as alternatives to direct investments, such as infrastructure funds and green bonds. Evidence shows that such instruments, where available, are popular with investors new to the sector.

Now more than ever is the time to mobilise institutional capital for renewable energy projects to accelerate the energy transition. By channelling capital to renewable energy, institutional investors can become a significant contributor to the global capital shift towards low-carbon solutions, while yielding higher returns in the longer term. Such a shift will, however, require combined efforts on multiple fronts with active engagement from all stakeholders; policy makers, institutional investors, public financiers, asset managers, and investors.

For more information, see IRENA’s Renewable energy finance: Institutional capital and the forthcoming report, Mobilising institutional capital for renewable energy.

-----


Earlier:

RENEWABLES NEED INVESTMENT $2.55 TLN
2020, August, 31, 12:15:00
BRITAIN'S RENEWABLE ENERGY UP
Over the last two years, the UK Manufacturing sector’s share of energy consumption is projected to increase to 17% up from 16% in 2018.
RENEWABLES NEED INVESTMENT $2.55 TLN
2020, August, 31, 12:10:00
HURRICANE'S ENERGY: THE CHEAPEST
In terms of energy stored and released, hurricanes pack a huge punch.
RENEWABLES NEED INVESTMENT $2.55 TLN
2020, August, 25, 13:55:00
HYDROGEN NEED INVESTMENT
Global green hydrogen projects adding 3 million mt/yr hydrogen production, significantly short of targetted global green hydrogen demand of 8.7 million mt/yr in 2030.
RENEWABLES NEED INVESTMENT $2.55 TLN
2020, August, 25, 13:50:00
JAPAN'S HYDROGEN STATION
With its hydrogen production capacity of 600 Nm3/h, the Tokyo Oi Hydrogen Station can fill about 10 fuel cell vehicles or six fuel cell buses in an hour
RENEWABLES NEED INVESTMENT $2.55 TLN
2020, August, 14, 11:45:00
WIND, SOLAR UP DOUBLE
The data showed wind and solar power increased 14% in the first half of 2020
RENEWABLES NEED INVESTMENT $2.55 TLN
2020, August, 13, 13:25:00
RENEWABLES FOR EUROPE
According to this research, three options could be pursued individually or in combination to achieve this goal: Offshore wind power, large solar parks, and roof-top solar systems.
RENEWABLES NEED INVESTMENT $2.55 TLN
2020, August, 13, 13:20:00
USEFUL GLOBAL WARMING
thermodynamic geoengineering, the affordable, long-duration storage that can convert and recycle the thermally stratified energy of the ocean for millennia.
All Publications »
Tags: RENEWABLE, ENERGY