The cost of electricity from solar or wind sources has dropped considerably in recent years. It has become competitive compared to fossil fuels. Renewable energies have therefore become essential for consumers. For investors, this is a real opportunity.
Fossil energy resources are running out, and at the same time, global energy demand continues to rise: it is expected to grow by more than 25% by 2040, according to the International Energy Agency ( AEI) (1). Therefore, the inhabitants of the planet must turn to clean energies, which have a big advantage: they are renewable.
The share of these energies in electricity production is already increasing significantly. “In the United States, renewable energies represented 1% of electricity production in 2006; they weighed 8% in 2018 and will be at the origin of 40% of production in 2030. In other words, these energies will become unavoidable.
Clean Energies, A Defensive Sector
Better: in some regions, they produce electricity cheaper than fossil fuels. Production costs have indeed fallen dramatically. For example, according to the International Renewable Energy Agency (IRENA), between 2010 and 2017, the average cost of electricity from photovoltaic installations fell from $0.36 to $0.10 per kWh, a decrease of the tariff of 73%. Thus, the era when we were interested in wind and solar power for ecological or political considerations is over. Today, cleaner energies are also economical.
Inexhaustible, cheaper, and growing: according to Xavier Chollet, clean energies have become a defensive investment sector. Especially since the objectives of “carbon neutrality” in 2050 will further encourage these investments.
Because in terms of clean energies, the biggest remains to be done. Capabilities are not all installed yet. In the years to come, it will still be necessary to deploy many photovoltaic farms and many offshore wind farms, then transport this energy. Conventional alternating current cables are not always enough. Major projects are therefore underway on all continents to install several thousand kilometers of ultra-high voltage direct current lines.
Good Growth Prospects
The other challenge is to avoid energy losses as much as possible with solutions that allow for better energy efficiency. Among end consumers, a real revolution will take place. Over time, households will replace their oil or gas boilers with more efficient heat pumps and electric air conditioning. In twenty years, most means of transport and factories will be electrified.
Manufacturers of turbines, submarine cables, semiconductors, and intelligent systems for less energy-intensive production, therefore, constitute as many investment opportunities as the Clean Energy strategy has been analyzing and seizing since 2007. Of course, Investing in equities or funds managed with equities presents a risk of capital loss. But betting on clean energies with e360 Power for example means contributing to a world where global warming will be better controlled while envisaging good growth prospects.
Key Points To Remember
Energy needs are increasing, and fossil resources are running out: clean and renewable energies are gradually taking over.
It is necessary to deploy new production capacities with photovoltaic and offshore wind farms and transport energy and avoid losses.
This sector is set to take such a boom that many today consider it a defensive investment sector and also know that Natural Gas Trading Enhances Portfolio Dynamics.
