Investment in renewable energy and low carbon technology has more than doubled in the past two years and is set to grow another 30% to $63.3b this year, according BlackRock Mlim. Merrill Lynch International Investment New Energy fund (MLIF) co-manager Poppy Allonby believes new energy technologies are becoming mainstream, in the wake of the global move toward alternative energy.
“Environmental pressure and voter concern, security of energy supply worries, rising traditional energy prices and falling alternative energy costs are pushing new technologies towards the top of governments’ agendas,“ Allonby says.
The sector is being driven by four long-term key forces, she adds. Globally, regulatory momentum is supporting the sector as governments put environmental policies into place.
“In the US, California has the solar incentive program and China has the renewable energy law which gives financial incentives and encourages investment,“ she says.
“The Stern report in the UK has addressed the economic impact of climate change, while France has increased the purchase tariff for solar electricity by 50%.“
Allonby says energy supply concerns, operational and technological advances, and the economic performance of the sector are also driving investor interest.
“Most countries do not have enough domestic resources and are forced to import energy resources,“ she says.
“Traditional energy prices for commodities such as oil and gas are high and, in our view, are likely to remain that way, Investmentweek.com said.
Take a look at the article about how the new energy sector creates jobs from today statesman.com: link
“One of the advantages of wind and solar power is that not only is it renewable but the cost of the electricity produced is pretty certain. Alternative energy sources are becoming cost competitive as companies begin to compete without subsidies.“
As the economic outlook for these companies improves, investors can benefit from high-growth performances, she says.
Last week I attended account firm Ernst & Young’s competition Entrepreneur of the Year. I was surprised how many of the nominated companies that somehow were in the renewable business. I about to write a serie of articles for E&Y about those promising danish growth companies and I will post some highlights here later this week.
