Renewable Energy

INVESTMENT FUNDAMENTALS

Renewable Energy - A Growth Industry

Investors are focussing on the potential returns from generating power from renewable, sustainable sources. Interest is being driven by wide ranging support mechanisms being introduced by governments around the world to encourage generation from renewable energy, to combat global warming by reducing greenhouse gas emissions and to diversify energy supplies.

This political drive is in turn being driven by increasing pressure from voters on climate change and the implications thereof. Currently the most economic of the renewable energy technologies, providing investors with good returns based on proven technology and with established mechanisms for raising project finance, are on-shore wind and hydro electric power.

FIM is actively involved with both technologies. In addition, FIM is actively reviewing mechanisms for adding value to clients' forestry estates through the utilisation of trees and forest residues as feedstock for biomass electricity generating plants.

For more detailed information please read FIM's paper - Renewable Energy - A Growth Industry 2010

UK Renewable Energy Pricing

The UK is a prime location to invest in renewables:

  • UK demand for electricity is forecast to continue to rise, despite the drive for energy efficiency, whilst supply from existing generators is forecast to decline as older plants which cannot meet emission targets or are outdated are decommissioned. This could lead to an increase in prices.
  • Generation from renewables continues to fall well short of targets set by the UK government, which has targeted 15% of total energy consumption to come from renewable sources by 2020. Continued governmental support provides a stable investment environment.
  • The UK has one of the best wind resources in Europe and a liberalised electricity market, providing free market access and a high total price for electricity from renewable generation.

For more detailed information please read FIM's paper - UK Renewable Energy Pricing Paper - December 2010