Welcome to “Fridays with Scott” segment of the Climate Change program.
So is there investment appetite for renewable energy? In this multi-part series, I explore the strength of clean energy investments.
On the supply side, some energy producers are investing in renewables. Shell has allocated as much as 8 percent of their capital budget or $2 billion to renewable energy projects, roughly four times what competitors BP and Total SA spend. CEO Van Beurden is questioned on the wisdom of pivoting away from oil & gas, Shell’s bread and butter, but he doesn’t see another option. If demand for oil & gas falls in the next decade as predicted, Shell would shrink if he doesn’t diversify. For other energy companies, they are doubling down on oil & gas.
Spurred by wind and solar sector growth, investment in America’s renewable energy industry exceeded $40 billion in 2017 according to Bloomberg New Energy Finance, and is tracking close to the same amount in 2018, showing surprising resilience despite policy headwinds.
While the industry’s continued growth looks strong, some analysts expect renewable energy installations will decline in the 2020s, putting the U.S. at risk of falling behind other nations that are investing heavily in renewables and the jobs that come with them.
We are hitting a pause, when we should be doubling down on the energy system – and the energy economy – of the future.
Fortunately, a new financial sector survey shows strong confidence that U.S. renewable energy projects will continue to increase in attractiveness compared to other investment portfolio asset classes, and cumulative U.S. private investment in renewable energy could reach up to $1 trillion between 2018 and 2030.
Stay tuned next Friday as I continue to elaborate on the investment appetite for renewable energy.
