Partner Content: Do renewables still have a long-term tailwind?

Capital Group
clock • 1 min read
Partner Content: Do renewables still have a long-term tailwind?

Despite some recent underperformance, three fundamentals should prove supportive in the longer term, say Capital Group’s experts

"In the short term, investor concerns about rising bond yields and inflation have dragged down the utilities sector," says Capital Group Investment Analyst Bobby Chada, "and a flood of cash into environmentally friendly investments in recent years has spurred fears of a green bubble."

But his view is that the fundamentals of Europe's largest clean energy companies remain strong, for three key reasons: falling renewable costs, new energy policies, and economic stimulus.

The first reason is the biggest, with the average cost of clean power generation - looking across onshore wind, offshore wind, or solar photovoltaic - dropping substantially every year. "Take offshore wind," Chada says. "Machines are getting bigger. Technologies to install and to build turbines are changing rapidly and the supply chain is evolving."

Meanwhile, the cost of the technology used to create green hydrogen also looks set for significant reductions in coming years.

Click here to read the full article on the Future Forward hub. Brought to you by Investment Week, Professional Adviser and Capital Group.

This post was funded by Capital Group.

More on Investment

Advisers have opportunity to deepen private market engagement

Advisers have opportunity to deepen private market engagement

Most client allocations to private markets are either 5%-10% or 1%-5%

Isabel Baxter
clock 18 November 2024 • 2 min read
Royal London cuts number of governed range portfolios

Royal London cuts number of governed range portfolios

Renaming remaining portfolios to reflect level of investment risk

Jenna Brown
clock 18 November 2024 • 1 min read
AJ Bell cuts fees across multi-asset income range

AJ Bell cuts fees across multi-asset income range

£1.5bn of inflows this year

Beth Brearley
clock 14 November 2024 • 1 min read

In-depth

Analysis: Advice M&A continues apace as FCA review looms

Analysis: Advice M&A continues apace as FCA review looms

Firms taking very different approaches to buying and selling

Isabel Baxter
clock 18 November 2024 • 7 min read
Your Autumn Budget briefing: Tax and pensions changes Labour could have in store

Your Autumn Budget briefing: Tax and pensions changes Labour could have in store

Budget comes as prime minister says country 'embrace the harsh light of fiscal reality'

Jen Frost
clock 29 October 2024 • 22 min read
In view: Plotting PFS change

In view: Plotting PFS change

From first operating loss since 2008 to sponsorship, board and revenue changes

Jen Frost
clock 17 October 2024 • 6 min read