Thanks to decades of fossil-fuel use, climate change is now an extremely pertinent and concerning issue. Many individuals, companies and nations are now looking for ways to provide the same services with a smaller carbon footprint. As the world’s energy consumers – from individual households to large-scale industry – are increasingly moving away from fossil fuels, opportunities will exist for companies operating in the competitive, scalable and environmentally sustainable renewables industry.
Subsidies have played an important role in supporting renewables’ progress, but are no longer required in many countries where market parity has been achieved (market parity being the case where the unsubsidised cost to generate renewable energy equals, on average, the like-for-like cost of fossil-fuel generation).
The cost of US onshore wind power has fallen consistently over the last ten six-month periods. Similar trends are also exhibited for onshore wind in other countries, as well as in offshore wind and solar power. Indeed, wind and solar have emerged as the two dominant technologies, and are likely to further consolidate their position given supportive regulation and their cost competitiveness.
Tom Atkinson, global research analyst for cyclical sectors, Newton Investment Management.