In Focus: Megatrends  

What green energy mega-trend is shaping the investment world?

While challenging, funds investing in these can provide societal benefits that outweigh the economic impact such as more emission-free, efficient energy production.

 

To alleviate the current burden on aged networks, we are seeing an increased investment into distributed energy schemes or generation that is co-located with consumers.

New behind-the-meter power sources are emerging which obviate the need for a grid.

Further, there are micro-grid solutions for commercial and industrial enterprises which combine several sources of renewable power generation together with energy efficiency management and storage, allowing consumers to have total control of their consumption and efficiency.

Clarifying the role of renewables

Overall, the shift to green energy is underpinned by the transition to renewable energy sources, with these, as well as nuclear power, posited as solutions to the current crisis we face.

In this regard, clarification around their respective future roles is critical, given the serious misconceptions around nuclear by many global authorities.

While numerous investors and members of the UK government, for instance, see it as an emissions-free option, the pollutive sources needed for its disposal mean it is far from sustainable and eco-friendly.

Further, we must understand that renewable sources are an intermittent solution.

As such, we urge global governments and investors to recognise that the likes of solar and wind power can play a significant role only when deployed alongside other technologies such as carbon capture and storage used in more conventional sources of energy.

Going forward, we urge governments and investors to take a strategic global approach and recognise there is not just one energy transition solution.

Diversification of solutions and support for those at the forefront of innovation here will be crucial in creating a greener planet.

Richard Lum is managing partner and co-chief investment officer at Victory Hill Capital Advisors