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Challenges Facing Investment In Renewables Industry Revealed

Posted: 06/03/2019

A new report has revealed that although there is growing investor appetite for renewables, there are still some serious challenges that will need to be overcome in order for additional investment in the sector to be opened up.

The paper, The green investor: why institutional investing holds the key to a renewable energy future, suggests that allocations to renewables will rise from 4.4 per cent to 7.1 per cent in the next five years.

But there are still some issues that need to be addressed, such as energy price uncertainty. More than half of those asked identified this as a top challenge when pursuing investment in renewables. And 41 per cent cited liquidity issues as a big challenge for them.

Some 34 per cent admitted that they find operating, implementation and execution costs a top challenge, while a further 34 per cent said they don’t have the size or scale to pursue investment in this area.

Government and regulatory barriers were cited by 33 per cent as a challenge to investing as well, while 52 per cent of survey respondents said that the biggest factor that would see them invest in the sector would be better government support and policies.

Co-Head of Energy Investments, at Octopus Investments, Matt Setchell commented on the findings, saying: “Institutional investors are waking up to the investment opportunity that comes with securing a renewable future. There is much to celebrate in the report. However, while institutional investors’ contributions are on the increase there remains a long way to go to plug the funding gap.

“We cannot afford to view increased allocations as ‘job done’. More needs to be done to unblock investment to help tackle climate change. Acting now is not an option, it is a necessity.”

Analysis carried out last month by Carbon Brief found that the amount of electricity generated in this country last year fell to its lowest level in 25 years. Output was down to 335 terawatt hours, while the share of generation made up by renewable sources reached its highest ever level.

Some 33 per cent of the country’s energy came from renewable sources and, when other low-carbon sources were taken into consideration, it was found that 53 per cent of the UK’s electricity generation came from low-carbon sources.

Wind, in particular, saw strong growth in 2018, rising by 16 per cent in just 12 months and by more than 100 per cent in the last five years.

Executive Director of RenewableUK, Emma Pinchbeck, commented on the news, saying that come the year 2030 offshore wind could in fact be generating over one-third of the country’s entire electricity needs.

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