The Future of Renewable Energy Investment Opportunities

 

According to the IEA (International Energy Agency), global renewable energy consumption will increase up to 111 billion BTUs (British Thermal Units) in 2021. This is up from 106 quadrillion BTUs in 2020. The growth indicates how the demand for renewable energy has increased significantly in the past few years. 

The good news for our planet is that renewable energy technology is getting better and more affordable than ever. As a result, it is creating huge renewable energy investment opportunities for companies, governments, and public investors.  In this post, we will take a look at how public investors can capitalize on these trends and invest in the renewable energy industry.

Renewable Energy Investment

Competition in the renewable energy industry is rising, which in turn opening various opportunities for individual investors and businesses. There are some attractive renewable energy investment opportunities but it requires a great understanding of its future scalability.

So, keeping this thing in mind, where do you look for the best renewable energy investments?

The covid-19 pandemic outbreak disrupted the power sector like any other industry in 2020, but it wasn't completely bad news. Since 2019, energy demand in 2020 decreased for all types of generating capacity, except renewables.

Coal, nuclear, gas, and oil demand declined between 3% and 9%, while renewable energy demand enhanced by almost 1%. These figures suggest that investors are considering past the renewables industry's short-term headwinds and focusing on its long-term benefits.

 

Reports show that wind capacity additionally grew by 8% in 2020, and the uptake is expected to boost in 2021. As per IEA forecasts, generation from solar energy is estimated to grow at an annual rate of 15% by 2030.

Another report titled 'Growth opportunities from Decarbonization' in the Global Power Market, 2019-2030, the most developed markets are predicted to shift towards renewable energy, while the coal energy sector is estimated to decline. This installed capacity of renewable energy and hydropower is expected to be about 54.1% by 2030, with solar and wind making up 37.9%.

This research report further stated that it would be difficult for conventional power project operators to remain profitable while competing with alternative power source options.

This report predicts development opportunities for market competitors will depend on different regions.

Investments in Europe's battery energy storage sector are predicted to grow by around $12.91 billion annually until 2030, while the total installed capacity is expected to increase from 2.91 GW in 2019 to 70.2 GW in 2030.

 

Regulations are moving ahead

The necessity for alternative energies is rapidly getting apparent. Governments around the world have embraced these concerns by passing mandates to limit the volume of detrimental emissions.

In December 2015, representatives from 195 countries at the 21st conference of the UNFCCC in Paris adopted the Paris Agreement to deal with greenhouse gas emissions, adaptation, and finance beginning in the year 2020, which should set the platform for a rising number of regulations across the world.

 

Returns in renewable energy investments

Oxford University had conducted research and their report told that investors typically require wind and solar energy projects to gain returns of at least 10% to 11%, reflecting the estimated low risk of such investments. Since 2010, solar photovoltaic, onshore wind, and offshore wind financing costs have reduced by 20%, 15%, and 33% respectively.

 Conclusion:

The global renewable energy sector is expected to witness continuous growth as governments push to meet new mandates. Consequently, it is creating wider renewable energy investment opportunities for investors. 

If you need such useful information that could help you in investing in different industries, TheInvestors Coliseum can help you by providing valuable, latest, and accurate information to our subscribers, especially those who are eagerly looking for early-stage investment opportunities.