The burning of fossil fuels to generate electricity and heat leads to the emissions of harmful greenhouse gases. Fossil fuels like oil, gas, and coal are among the largest contributors of global climate change. To avoid the worst impact of climate change, emissions of greenhouse gases have to be reduced considerably. For this purpose, the world needs to reduce its dependency on fossil fuels. Investing in alternative sources of energy that are clean, sustainable, and reliable is the need of the hour. Paul Favret has substantively liquidated Oil and Gas Investments recently to pivot to sustainable investments like solar and wind.
Paul Favret mentions valuable insights on investing in renewable energy
The Fossil fuel industry has only exacerbated the impacts of climate change. However, the demand for energy across the world keeps rising. To meet this demand exploring renewable energy resources has become critical today. This situation has made investing in the domain of renewable energy a smart move for many. Investing in renewable energy comes with the reputational advantage of reaching inspiring corporate sustainability goals, among other things.
Oil and gas prices have been subject to wild fluctuations historically. It represents huge risk exposure for any investor/portfolio manager. In fact, the oil industry currently is on the front lines of rising investor fears. A lot of these fears are associated with the long term returns of fossil fuel energy sources.
Coming to renewable energy sources, most of the costs involved in solar and wind energy are associated with the infrastructure needed to capture it. Fortunately, these costs have gone down over the years. The same cannot be said for the fossil fuel industry. The cost of fossil fuel based electricity is expected to increase further with time. On the other hand, expenses linked with renewable energy sources are going down. Moreover, even mainstream institutional investors are today acknowledging that climate change is not just a threat to the environment, but also to wealth. Considering these factors, many investors are shifting towards renewable energy sources, Paul Favret being one of them. Paul is the Founder and Owner of Abundant Investments. He recently announced the liquidation of all its Oil and Gas Investments initiated in the past ten years. This was done to capture losses and pivot to more sustainable investments.
Renewable energy sources have been picking up pace in the market over the last decade or so. Solar power has especially evolved in the recent years, both in terms of technology and performance. Without any doubt, renewable energy is moving towards becoming a part of mainstream energy sources. Investors and developers are now looking to inject capital into dormant sectors. This has opened up many growth opportunities. Renewable energy projects additionally are attracting many institutional investors owing to their attractive and stable yields.
There are many factors that have strengthened the business and investment case for renewable energy sources. Growing competitiveness in the energy market and advances in renewable energy technology are two of the major ones. This has opened up brand new investment opportunities that can transform energy systems in many countries, including the US.