One of the less well-kept secrets in the renewables industry is the reason why funds that invest in these energy technologies can get away with offering such slender returns to their investors. Take Greencoat or The Renewable Infrastructure Fund, which between them own more than £2bn of renewable assets in the UK. These entities aim to offer returns of some 6 to 8 per cent to their backers. Compare that to conventional thermal-powered generators such as US-based Calpine, a listed group that achieved long-term average annual returns of 15 per cent. The answer is to be found in the government-backed contracts that assure renewable generators a market for any power they can produce at a guaranteed price. By taking away the market risk that any megawatt hours (MWh) produced by a wind turbine or solar panel cannot find a buyer, or might be unloaded at uncertain prices, the state enables owners to raise capital on enviably fine terms. Far from selling to flinty-eyed power investors, they can flog their wares to herbivorous pension funds, which view their shares as something close to high-yielding gilt-edged securities.
FT 21st Aug 2017 read more »
One of the biggest criticisms of the renewable-energy industry is that it has been propped up by government subsidies. There is no doubt that without government help, it would have been much harder for the nascent technology to mature. But what’s more important is whether there has been a decent return on taxpayers’ investment. A new analysis in Nature Energy gives renewable-energy subsidies the thumbs-up. Dev Millstein of Lawerence Berkeley National Laboratory and his colleagues find that the fossil fuels not burnt because of wind and solar energy helped avoid between 3,000 and 12,700 premature deaths in the US between 2007 and 2015. Fossil fuels produce large amounts of pollutants like carbon dioxide, sulfur dioxide, nitrogen oxides, and particulate matter, which are responsible for ill-health and negative climate effects. The researchers found that the US saved between $35 billion and $220 billion in that period because of avoided deaths, fewer sick days, and climate-change mitigation.
Quartz 17th Aug 2017 read more »