From Equities to Utilities, Times are Breezy and Sunny for Renewables
From broad, market-wide indicators, to actions by individual leading banks and choices by U.S. utilities, multiple signs point to a transformation of sentiment around renewable energy.
One sign can be read in equity prices. “An index of 40 publicly-traded solar companies, wind turbine component makers, and others that benefit from reduced fossil fuel consumption is up 20% this year,” Bloomberg observes. “That’s more than double the S&P 500’s 9.8% gain, and better than the 8.3% rise by an index of leading coal companies.”
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The rally among “eco-friendly” stocks shows that Donald Trump’s “pro-fossil fuel agenda hasn’t damaged investor support for clean energy,” the news agency writes. Or, as Bloomberg New Energy Finance’s lead solar analyst, put it: “Nothing dreadful has happened, and these companies continue to execute.”
“We are seeing catalysts for these markets driven by the fact that people increasingly realize clean energy is more profitable than conventional energy,” commented David Richardson, whose Impax Asset Management has about US$8.7 billion under management.
Last month, Wall Street’s second-biggest investment bank. Goldman Sachs, disclosed that it had agreed to buy 68 megawatts of electricity from a wind generation facility in Pennsylvania to power its data centres in New Jersey beginning in 2019. But “Goldman won’t just be in the renewables market for its own needs,” the Institute for Energy Economics and Financial Analysis reports. “The firm’s commodities arm has been building a business to connect corporate buyers of electricity with [clean energy] developers.”
(In a sign of the financial sector’s ongoing ambivalence around energy investments, however, DeSmog points out that another Goldman unit, rail terminal operators USD Partners, signed a three-year agreement last month to “facilitate” diluted bitumen transfer from Alberta to a major oil storage and shipment hub at Cushing, Oklahoma.)
Beyond Wall Street, however, “smart business leaders are doubling down on wind power” across the United States, Renewable Energy World declares. Citing several senior U.S. electrical utility executives, the outlet notes that “clean power sources, such as wind, solar, and natural gas, are now customers’ preferred energy choices. And this new energy mix is actually improving America’s grid, adding resilience and reliability, along with more than half a million U.S. jobs, while saving U.S. energy customers and ratepayers billions of dollars in electricity costs.”
“Economics are driving what’s happening in the industry,” Xcel Energy CEO Ben Fowke told REWorld. His company predicts that wind will become its largest source of generation as early as 2021.
“What’s even more amazing,” Fowkes added, “is the price. We’re looking at the low teens to low 20s [in U.S. dollars per megawatt hour], levelized across the 25-year life of the project. That beats gas, even at today’s prices. I like to say we backed up the truck because the fuel of tomorrow was on sale today.”
Whatever America’s fossil-fixated administration prefers to think, REWorld adds, “the growth of clean power as a mainstream player in America’s energy mix is a business reality that won’t be denied. Utility leaders are all buying wind and solar power now because those energy sources are winning on price and integrating fine with the grid.”