Why Renewable Energy Investments Are A Smart Move

By Ben Botes, Joint CEO Caban Capital PLC - www.cabancapital.co.uk

Renewable energy investments have been a hot topic all over the news in recent months. Tech giant Google announced at the beginning of the year that it would be investing $1 billion in renewable energies in order to make its operations totally green. And just as recently as June, Warren Buffett boldly stated he was ready to double his $15 billion investment in wind and solar power in the US. Traditionally it was seen as the domain of the large private equity firms and Venture Capitalists to invest in Renewable energy but increasingly now through organisations like Caban, you too can both get involved and benefit from the opportunities involved.

Plastoil is the most recent beneficiary of Renewable Energy Investment from Caban

So why all the sudden interest in renewable energy? Because investing in renewable energy is a smart move for investors and offers a wide range of possibilities for future reinvestment and acquisitions.

New research by analysts at Bloomberg New Energy Finance stated that new renewable power capacity is set to rise by anywhere from two and a half times to more than four and a half times between now and 2030. That means the likeliest scenario implies a jump of 230% - $650 billion per year by 2030. This jump would be driven by further improvements in the cost-competitiveness of wind and solar technologies relative to fossil fuel alternatives, as well as an increase in the roll-out of non-intermittent clean energy sources like hydro, geothermal and biomass.

United Renewable Energy Group is another Caban Investment

Large companies, like Google, see investment in renewable energy as a step in the right direction for their company’s success. Rick Needham, Google’s Director of Energy and Sustainability, stated that “procuring power for ourselves and investing in…renewable power plants…all make business sense. They make sense for us as a company to do. We rely on power for our business.”

And Google’s not the only one. As more advances are made in the industry, more and more companies will be turning their attentions to it. Which means the possibility for investment growth is huge.

In the power sector, the research from Bloomberg New Energy Finance forecasts that 70% of new power generation capacity added between 2012 and 2030 will be from renewable technologies (including large hydro) and only 25% will be in the form of coal, gas or oil with the remaining being nuclear. This proves that there will be a further growth in renewable energy demand as advances in the industry move forward. Capital requirements for renewable energy could reach $880 billion by 2030, under assumptions by Barrier Busting.

But in order to reach those requirements, it would require an additional $2 trillion (a 22% increase) invested in supporting infrastructure such as long distance transmission systems, smart grids, storage and demand response.

What this means is, despite recent news showing a downturn in clean energy investment since 2011, renewable technologies will form the anchor of new generating capacity additions, even under a less optimistic view of the world economy and policy choices. Investments in renewable energy will be needed as companies seek to reduce their reliance on fossil-fuel generation and major investments will be relied on to make important technological advances in the industry in order to make the industry more competitive and help generate a turnaround in company share prices.

Investors are beginning to revisit renewable energy investments after a number of years of wading back. While a rapid decline in the prices of solar modules and wind turbines sent investors running a few years ago, alternative-energy prices have stabilized at lower levels and renewable energy is becoming much more competitive in its market. Overall, the investments that are currently going into renewable energy are only scratching the surface of the amount of investment needed in the industry, as well as the amount of opportunities available for future investments and acquisitions. Renewable energy investment is going to be the go-to sector for investors in the future, but smart investors are already getting involved in it now.

If you are in London and want to find out how you can get involved in Renewable Energy Investments join us at one of our London events as below.