Latest news

The renewable opportunity for investors – in 6 graphs

3 min read time

The advantages of renewables vs fossil fuels  

Renewable energy is on the up. The International Energy Agency has predicted that renewables will overtake coal to become the world’s largest source off electricity generation by early 2025i.  

Global energy mix estimates (% mix of total generation)    

Source: Bloomberg New Energy Finance 

Compared to traditional fossil fuel intensive sources of energy, investments in renewable energy: 

  • Deliver better returns in advanced economiesii
  • Is not subject to the geopolitics that play a significant role in the availability, and price, of many fossil fuelsiii,  
  • Experienced lower volatility and delivered higher total returns on the stock market (over the ten years from 2010 to 2020iv).  

Total returns for green power beat fossil fuels globally in the last 10 years   

Source: Imperial College Business School and International Energy Agency via Bloomberg 

The costs associated with renewable energy have continued to fall in the last five years, bringing both solar (PV) and onshore wind to well below the costs of gas and oil, with offshore wind trending towards the same.  

Global levelized cost of electricity benchmarks   

Source: Bloomberg New Energy Finance, 1H 2022 LCOE Update report  

N.b. The global benchmark PV, wind and storage is a country-weighted average using the latest annual capacity additions. The storage LCOE is reflective of a utility-scale LI-ion battery storage system with four-hour duration running at a daily cycle and includes charging costs. 

By helping shift the global energy mix away from fossil fuels, renewables can provide a positive social impact by easing the soaring economic burden of volatile energy bills, in a sustainable way.

Risk management and diversification

Half the world’s fossil fuel assets (totaling £8.1 tn – £10.3 tn) could become worthless by 2036v as demand falls. The resulting excess of supply and potential stranded assets could result in long-term detrimental impacts on an investment portfolio.  

Demand and supply shocks to world oil and gas prices caused by global political and social events in recent years have illustrated the volatility of the fossil fuel market. Geopolitical events can disrupt supply, driving prices up, while economic declines often decrease demand, causing prices to fall. This correlation to market events can result in reduced diversification benefits of incorporating energy into a wider portfolio. 

Crude oil price over the last 50 years   

Source: U.S. Energy Information Administration, Refinitiv (March 2022) 

Projected trends and the impact of emissions 

Under current policies and economic activities, we are not on track to meet the global decarbonisation targets set out in the Paris Agreement.  

Global greenhouse gas emissions in gigatons of carbon dioxide equivalent   

Source: Climate Action Tracker 

Globally, a shocking 8.9 million deaths per year are linked to air pollutionvi – a figure which will likely increase if no active change is made. By increasing our production and usage of green energy over fossil fuels, lower levels of greenhouse gases are released into the atmosphere. 

Investing in renewables can mitigate the worst effects of climate change and improve people’s health while supporting a Net Zero, sustainable, portfolio and the transition to a Net Zero world. 

The Carbon Intensity of Electricity Generation (In g CO2eq/kWh)  

Note: Data is the 50th percentile for each technology from a meta study of more than 50 papers Source: IPCC Special Report on Renewable Sources and Climate Mitigation 

Summary 

Renewables are a reliable, long-term and sustainable alternative to fossil fuels. They are cleaner, better both for the environment and human health, are not finite and offer lower volatility returns for investors compared to traditional energy sources.   

Be a part of the action. Get in touch to find out how we can support your renewable investment journey to secure attractive, diversified returns whilst creating a more sustainable and energy efficient future. 

Bluefield, powering a sustainable future.


[i] International Energy Agency, 2022

[ii] Imperial College Business School, 2020

[iii] Melodia and Karlsson, 2022

[iv] Bloomberg, 2021

[v] Mercure, 2021

[vi] The World Counts, 2022


DISCLAIMER:

This brochure is being issued by Bluefield Partners LLP (the Investment Adviser), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority (the FCA)

Notice to UK Recipients: The issue or distribution in the United Kingdom of this document in the United Kingdom is being made only to, or directed only at persons falling within one or more of the

following exemptions from the promotion of unregulated collective investment schemes regime in section 238 of the Financial Services and Markets Act 2000, as amended from time to time (“FSMA”):

(i) authorised firms under FSMA and certain other investment professionals falling within Article 14 of the FSMA (Promotion of Collective Investment Schemes) (Exemptions) Order 2001, as amended (“CIS Order”) and their directors, officers and employees acting for such entities in relation to investment;

(ii) high value entities fatling within Article 22 of the CIS Order and their directors, officers and employees acting for such entities in relation to investment;

(iii) persons to whom it may otherwise lawfully be distributed under the CIS Order or Section 4.12 of the FCA’s conduct of business sourcebook.

The distribution of this Presentation to any other person in the United Kingdom is unauthorised and may contravene FSMA. No person falling outside such categories should treat this Presentation as constituting a promotion to them or rely or act on it for any purposes whatsoever.

Notice to EEA Recipients: Recipients of this Presentation that are domiciled or have their registered office in the European Economic Area (“EEA”) should note that this communication is provided on a strictly confidential to per se professional clients and eligible counterparties to establish potential investor interest

By receiving this Presentation, you confirm that either:

(i) you reside in an EEA Member State that recognises the UK as an equivalent jurisdiction for the purposes of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (“MiFID II”) and are therefore permitted to receive this Brochure from Bluefield Partners and discuss its contents; or

(ii) you have received this Brochure from a third-party distributor appointed by Bluefield Partners that is duly authorised under MiFID II and established or passported in your EEA Member State.

Notice to EEA Recipients: The Presentation of Bluefield Partner’s as well as the dissemination of the given information may depend on local regulations. There is no intention to offer or sell products in countries or jurisdictions where such offer or sale would be unlawful under the relevant domestic law. Investors must inform themselves about the laws which are in force in their country or jurisdiction.

By reading this Brochure, you agree to be bound by the following limitations: (i) this document has not been verified and is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment, is intended for information purposes only and does not constitute investment advice; (ii) the information and opinions contained in this document are for background purposes only and do not purport to be full or complete; (iii) no reliance may be placed for any purpose on the information or opinions contained in this document or their accuracy or completeness; (iv) no representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or opinions contained in this document by the Investment Adviser; and (v) no liability is accepted by the Investment Adviser for the accuracy or completeness of any such information or opinions.​

This document, or any copy of it, may not be: (i) taken or transmitted into the United States of America; (ii) distributed, directly or indirectly, in the United States of America or to any US person (within the meaning of regulations made under the Securities Act); or (iii) taken or transmitted into or distributed in Canada, Australia, Japan, the Republic of Ireland or the Republic of South Africa, or any other jurisdiction where to do so may constitute a violation of the securities laws of any such jurisdiction, or to any resident of any such jurisdiction.  Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Register for regular updates

Terms acceptance(Required)