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Footing The $9 Trillion Renewable Bill

Alternative Energy

As the world is growing increasingly conscious of the need to invest in cleaner and more sustainable energy to limit the impact of global warming, it’s no secret that a faster and universal renewable energy transition will require trillions of dollars of investment over the next couple of decades.

The trillion-dollar question is, who will foot the bill?

According to Bloomberg’s Nathaniel Bullard, the biggest future investors in clean energy could be the largest institutional funds that manage more than US$1 trillion of assets each. Basically, the money is out there, it just needs to be realigned to the demand for investment in renewable energy.

Demand exists. Bloomberg New Energy Finance (BNEF) has estimated that zero-carbon power generation is expected to attract US$9 trillion of investment until 2040.

According to BNEF’s New Energy Outlook 2017, “Renewable energy sources are set to represent almost three quarters of the $10.2 trillion the world will invest in new power generating technology until 2040, thanks to rapidly falling costs for solar and wind power, and a growing role for batteries, including electric vehicle batteries, in balancing supply and demand.”

CO2 emissions from the power generation sector are expected to increase by one-tenth before peaking in 2026. Still, an additional US$5.3 trillion investment in 3.9 TW of zero-carbon capacity would be required to keep the planet on a 2-degrees-Celsius trajectory, the NEO 2017 says.

According to the International Renewable Energy Agency (IRENA), the overall energy investment needed for decarbonizing the energy sector will require an additional US$29 trillion until 2050.

So where would those funds come from? According to Bullard, they could come from the biggest asset managers. Each of the top ten institutional managers—BlackRock, Vanguard, State Street, Fidelity, BNY Mellon, PIMCO, J.P. Morgan, Capital Group, Goldman Sachs, and Prudential Financial—has assets under management worth more than $1 trillion, with the leader BlackRock managing US$5.7 trillion in assets.

There is demand and there is supply, and the challenge now is to align them one to another, Bullard writes.

A growing number of investors want to know how their investments impact climate change. According to Bloomberg Gadfly columnist David Fickling, many of the biggest institutional investors have been backing shareholder resolutions on more disclosure about sustainability and climate change.

So far this year, shareholders have filed more climate resolutions with U.S.-listed firms than the combined number of such resolutions proposed for voting in 2015 and 2016, data by sustainability nonprofit organization Ceres shows.

Then there’s the fact that investors are chasing higher yields, and today’s investment-grade yields are much lower than before the 2007-2008 crisis.

According to the Global Financial Stability Report October 2017 by the International Monetary Fund (IMF), “there is too much money chasing too few yielding assets: less than 5 percent ($1.8 trillion) of the current stock of global investment-grade fixed-income assets yields over 4 percent, compared with 80 percent ($15.8 trillion) before the crisis.”

Institutional investors are looking not only at sustainable investment strategies—they are also chasing higher yields.

So the trillions of dollars necessary for zero-carbon energy is out there on the market. Could it be as simple as just aligning demand and supply by reallocating it to investments in renewables?

By Tsvetana Paraskova for Oilprice.com



58 Comments on "Footing The $9 Trillion Renewable Bill"

  1. GregT on Wed, 13th Dec 2017 5:03 pm 

    Sorry Ghung, a bit of an exaggeration on my part. I did buy an FM80, partially on your advice. Shipped to my door, it set me back $1049 CAD.

  2. Ghung on Wed, 13th Dec 2017 5:11 pm 

    I was hoping there was some sort of Jesus controller I missed out on; turns 500 watts into 5000 😉

    Outback does have the newer FM100 that comes close:

    “The FLEXmax 100 is the latest innovation in Maximum Power Point Tracking (MPPT) charge controllers from OutBack Power.

    The advanced FM100 MPPT algorithm offers increased energy harvest from the PV array than other MPPT controllers. The FLEXmax 100 delivers both higher voltage and higher power, offering improved flexibility and performance.

    OutBack network communications and OPTICS RE compatibility allows the FLEXmax 100 to be remotely programmed, monitored and controlled via any internet connected device providing unrivalled system integration.

    The FM100-300VDC is a top-of-the-line high performance, efficient and versatile charge controller for your advanced power system.”

  3. Davy on Wed, 13th Dec 2017 5:26 pm 

    I just purchased a MidNite Classic MPPT Charge Controller for $639. The inverter is what hurt. I have a Magnum MS Inverter / Chargers $1729.

  4. Apneaman on Wed, 13th Dec 2017 6:05 pm 

    clogs report. This guys report, that guys report here’s another alt energy think tank’s report report study, 100% by next Tuesday and on and on with the fucking half wits and their hopium reports.

    The truth of the matter is that total world energy demand has barely changed in 40 years.

    Fossil fuels still make up 80% or more of total world energy demand.

    Ya gots nutting green dreamers.

    What you should do is take all the hopey alt energy reports from the last 25 years and stack them on top of each other and use that massive stack of dumb reports as a tower for a wind turbine.

    This way the reports will finally be useful.

  5. Apneaman on Wed, 13th Dec 2017 6:12 pm 

    Record heatwave sweeping across Australia with highs of 43C

    https://au.news.yahoo.com/vic/a/38264095/record-australian-heatwave-sweeping-across-temp-above-40c/

    Aussies warned to ‘stay inside’, respect fire bans as temperatures soar sky high

    https://www.9news.com.au/national/2017/12/13/09/50/sweltering-day-ahead-for-aussies-across-the-nation

    Well there are plenty of Rupert Murdoch loving climate denying scum down under – let em fry. Dumb fucks.

  6. Antius on Wed, 13th Dec 2017 6:43 pm 

    ‘clogs report. This guys report, that guys report here’s another alt energy think tank’s report report study, 100% by next Tuesday and on and on with the fucking half wits and their hopium reports.’

    Clog gave the impression that this was a 100% renewable energy strategy, but it is in fact more complex than that.

    It presents a possible scenario for reducing CO2 emissions by 90% by: (1) Reducing energy consumption by 40%; (2) Switching to a cleaner mix of fossil fuels; (3) Substituting renewable energy as a way of keeping CO2 emissions down.

    The trouble is, it will be difficult to achieve the sort of energy intensity cuts that will make the plan workable, especially in the electricity sector, without offshoring most of Germany’s industry. And sourcing that much biomass is not an environmentally sound way of using land. It would be better to return that land to nature.

  7. Cloggie on Thu, 14th Dec 2017 12:41 am 

    @Antius – you are right, I was a little too quick. I found out that the 2012 report…

    https://www.ise.fraunhofer.de/content/dam/ise/de/documents/publications/studies/studie-100-erneuerbare-energien-fuer-strom-und-waerme-in-deutschland.pdf

    …which is indeed about 100% renewable, had an update in 2015, in English, covering the missing pieces of the 2012 report (transport among others). I had assumed this 2015 report would again be about 100% renewable, but in hindsight it is “only” about 80-90% reduction as compared to reference year 1990. Probably brought in line with EU directives that does require 90% in 2050, not 100%.

    Not a big deal really.

    We are going to have a solid long 10 ten days Christmas holiday this year. Hope to read the report then and summarize it in a post.

    This is the first report I am aware of that constructs in great detail how a renewable energy base could look like, including price tag.

    And the missing piece, the storage gap, seems to be have been solved as well:

    https://deepresource.wordpress.com/2017/12/11/high-temperature-electrolysis/

    https://www.youtube.com/watch?v=eku0GuSKiIc

  8. Davy on Thu, 14th Dec 2017 3:45 am 

    “And the missing piece, the storage gap, seems to be have been solved as well:”

    seem
    give the impression or sensation of being something or having a particular quality.
    “Dawn seemed annoyed”
    synonyms: appear (to be), have the appearance/air of being, give the impression of being, look, look as though one is, show signs of being, look to be; More
    used to make a statement or description of one’s thoughts, feelings, or actions less assertive or forceful.
    “I seem to remember giving you very precise instructions”
    be unable to do something, despite having tried.
    “he couldn’t seem to remember his lines”
    used to suggest in a cautious, guarded, or polite way that something is true or a fact.
    “it would seem that he has been fooling us all”

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