Global Head, Renewables and Cleantech,
Global Banking, HSBC
About 10 years ago, renewable energy was still a niche area, of interest primarily to specialist investors. The energy was typically more costly than traditional sources such as gas or coal and played a relatively small role in helping countries meet their needs.
Today, renewables are a growing part of the energy mix in dozens of countries. Portugal met its electricity needs using renewables alone for four consecutive days in 2016; while on a windy day, Germany can meet more than 100 per cent of its national electricity needs from renewables.
Thinking about renewable energy has become part of 'business as usual' for most major companies
The broad direction of future legislation is clear. National governments around the world have made major commitments to reduce carbon emissions over the long term. Technology has also improved, with some forms of renewable energy now able to compete on price with fossil fuels.
Thinking about renewable energy has become part of “business as usual” for most major companies. Technology firms, high street retailers and oil and gas companies are among those studying the sector and assessing the opportunities. Some have made such substantial investments in renewables that they have more energy than they can use themselves – and want to sell the surplus to consumers, subject to permission from regulators.
Clients often ask me about emerging technologies, new policies and changing legal requirements. Given the pace of change over the past decade, it would be unwise to make categorical claims about the future. Not all new technologies will succeed: some investors will see the products they have backed become obsolete before they even reach the market.
With that said, there are some trends reshaping the sector today that we are looking at closely. These include:
This list is far from exhaustive – and in many areas, the decisions of governments and regulators will have a profound impact on how new technologies develop and where private companies choose to invest.
World leaders have made clear that they expect the society of the future to be low-carbon. This means changing the way we do business, manage natural resources and use energy. Exactly what those changes will be, and when, where and how they will occur is the subject of a fast-moving debate. It is a fascinating moment in energy history.
Working in HSBC’s Infrastructure and Real Estate Group, Robert Todd advises large organisations such as multinational companies on investing in renewables and clean technology. Here, he shares his views on the rising profile of green investment – and on some of the trends reshaping the low-carbon sector.
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