« View All Blog Posts

Global Trends in Clean Energy Investment
By Michael Schweibinz

Which energy solutions will power our planet in the decades to come? It’s an important question, but without the ability to predict the future, we must rely on emerging energy trends to provide us with perspective on what’s to come. Michael Liebreich, Chairman of the Advisory Board and Founder of Bloomberg New Energy Finance, did just that from the main stage of the 25th annual SRI Conference.

Energy is an important component of any well-diversified portfolio, SRI or otherwise. Liebreich believes there are three energy-related mega-trends emerging that will define our energy future: cheap clean energy, unconventional oil and gas, and acceleration in energy intensity reduction around the world.

He believes the shift out of coal, oil, and gas (fossil fuels) into renewables is a game changer. Fortunately, this phase change is already taking place: “It is changing from a centralized, fossil-based, dumb, analog, and geopolitically unstable system, to a system that is much more distributed, smart, digital, resilient, local, and empowering.”

 

 

 

Liebreich cited impressive statistics on the success of solar- and wind-generated power. “The price of solar has come down 99% since the mid 1970’s.” He also emphasized, “I get asked if these cost reductions will ever stop, and I have a very simple answer: NO.” Similar to the continuing price decrease of flat screen TVs (so long as there are no significant resource constraints), the price of solar is expected to continue to decline at increasingly rapid rates.

The cost of wind has not decreased quite so spectacularly, but it’s still quite significant, and the performance of wind turbines has increased measurably. The combination of the two factors has led to a 26% cost reduction per kilowatt hour of power generated by wind since 2009.

The United States is not the only nation cleaning up its act; in fact, many countries are ahead of the U.S. in this arena. China is even stepping up. The devastating effects of air pollution has motivated the Chinese to “become deadly serious about cleaning up their air, and clean energy is a big part of that.” The country has radical plans in place to turn their energy sources and uses in a very different direction… dramatically reducing their consumption of coal as shown in the graph below.

 Liebreich’s presentation was filled with encouraging trends. The faster we move into renewable energy, the more sustainable both our economy and environment will be in the future. The trends of today are building a strong foundation for a renewable and sustainable future.

At First Affirmative, we understand that the ways we save, spend, and invest can dramatically influence both the fabric and consciousness of society. We believe that in addition to the benefits of ownership, investors bear responsibility for the impact our money has in the world. Are you making conscious decisions about the impact of your consumer purchase and investment decisions?Learn more about Investing with First Affirmative.

Mention of specific companies or securities should not be considered an endorsement or a recommendation to buy or sell that security. Past performance is no guarantee of future results.

 

Posted: January 19, 2015