RENEWABLE ENERGY IS THE FUTURE
In association with Helvetia Wealth |
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| Guy van der Walt, Managing Director,
Helvetia Wealth |
Investments in renewable energy are investments in our environment, our future and our planet writes Guy van der Walt. He advises on the investment options available and how to make the most from an investment
The world is, in fact, facing two energy crises. The first is rooted in scarcity and traditional power politics. It involves the struggle by the world’s largest and most energy-hungry economies to get hold of the natural resources they need. Recently the International Energy Agency warned that the world oil market would be “extremely tight” over the next five years because demands from China and other emerging economies are constantly rising. The struggle to find new oil is a familiar sort of conflict, reminiscent of the 19th century “great game” or earlier imperial clashes.
The second energy crisis is new. It is driven by climate change and demands international co-operation rather than competition. While the first crisis leads politicians and businessmen to search out more oil and gas, the second crisis demands that they radically reduce their economies’ dependence on hydrocarbons.
WHY INVEST IN ENERGY?
There are a number of reasons why investor should seriously consider investing in renewable energy most noticeably because there is substantial growth potential. Goldman Sachs has counted 49 countries with new policies on renewable energy in place that will foster rapid growth in clean energy funds.The EU has committed itself to more than doubling the amount of energy coming from renewable energy sources by 2010 and the aim is 20% by the year 2020. In order to meet EU targets solar energy must grow by 30% per annum. EU countries are putting in place legislation to realise this goal with other countries outside the EU, such as Japan, China and Australia are following in a similar direction.
The growth in renewable energy is driven by rising energy needs and costs, climate change, concerns about quality of air and water, rising educational levels in countries like India and governmental policies. It is estimated that the renewable sector should grow by 20% per annum.
A number of organisations are already investing in renewable energy proving it to be an excellent investment opportunity. Majors like GE, Siemens and Sanyo are all investing large amounts of money in renewable energy. BP recently announced plans to invest over $8 billion over the next decade.
DIVERSIFY YOUR PORTFOLIO
Market inefficiencies occur because of a lack of expertise about the sector amongst the financial community. However, the sector comprises many very interesting small and medium sized companies, which are below the radar screens of the big investment banks but that are proving to be a good investment option.
We have seen there is huge appetite for renewable energy investment in Ireland. The investment percentage depends on the asset allocation of each investor so one cannot say what is a standard investment. However, renewable energy, from our point of view, based on the fundamentals of our own and our partner’s research, is a must have component of any existing portfolio. It is a solid asset in which to start diversifying your asset model if, for example you are heavily weighted in property.
EXPERT GUIDANCE
Investors who want to integrate renewable energy products into their investment portfolios should use products from Asset Managers who understand the renewable energy sector best. The analyst and fund management team of the Hornet Renewable Energy Fund have been analysing and investing in the renewable energy sector over the last five years, which is a relatively long period in the track record of most renewable energy funds.
Author: Guy van der Walt, Managing Director, Helvetia Wealth
T: +41 4456 72230
E: g.vanderwalt@helvetia-wealth.ch
W: www.helvetia-wealth.ch
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