…Because The Returns Are Much Better

Global Renewables Investment Return 7 Times Higher Than Fossil Fuels

Felicia Jackson, March 19, 2021 (Forbes)

“…Renewable power has a superior risk/return profile over fossil fuels both in periods of volatility and under normal conditions…[L]isted renewable power portfolios have outperformed listed fossil fuel portfolios in all markets…[and] the cost of capital remains lower for renewable energy companies than fossil fuel companies…[R]enewable power generated [over 7 times the] total returns over the last ten years, at 422.7% against 59% for fossil fuels or over 7 times the return…Annualised volatility was lower than fossil fuel portfolios in the Global and Advanced economies and higher than the fossil fuel portfolios in China and Emerging Markets & Developing Economies…[There was a] superior risk/return profile for renewable power portfolios in both typical market conditions and during global economic imbalances…

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…[T]he global renewables portfolio is less correlated to the wider market than fossil fuels…[because] the existing correlation fell during the recent economic downturn, highlighting the potential for diversification opportunities…[and because] recent economic volatility has resulted in deteriorating fundamentals within the energy sector – with renewables showing greater resilience…[That trend is] likely to continue as increasing numbers of countries set net-zero targets for 2050, and growing concern amongst investors and the public about the negative impacts of energy generation. Climate risk, both physical and in terms of policy possibilities – especially around a carbon tax – are only going to affect the sector further. But there is a long way to go…” click here for more

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