Investment trust insider on renewables – James Carthew: How the renewables class of 2013 has changed beyond recognition
Following the recent new issues and the oversubscribed £198m placing by Greencoat UK Wind (UKW) last week, the now 17 investment companies in the sector have a combined market value of about £10.5bn and are within a whisker of overtaking the UK equity income sector on that measure.
When the renewable energy sector launched in 2013 with the flurry of flotations from UKW, Bluefield Solar Income (BSIF), The Renewables Infrastructure Group (TRIG) and Foresight Solar (FSFL), it was a pretty parochial affair. Some closed-end funds had the freedom to invest overseas but the initial focus was the UK and, within that, onshore wind and solar. It was relatively easy for investors to get their heads around the investment proposition.
Today, as the sector goes through yet another phase of explosive growth, the breadth of opportunity offered to investors is considerable. This goes for the range of technologies on offer as well as the spread of geographies. It is becoming increasingly hard to make direct comparisons between the different players.
If you are prepared to invest through a listed fund making equity investments rather than investments in individual projects, the opportunity set is even broader. For example, Ecofin Global Utilities and Infrastructure (EGL) holds stakes in companies such as Brookfield Renewables, which has a 20GW global portfolio of generation assets with a bias to hydroelectric projects, and EDP, which, through its stake in Spain’s EDP Renovaveis, is one of the world’s largest developers of wind farms.
There is a benefit in diversification, which is a message that I have repeated many times in connection with JLEN Environmental Assets (JLEN). It regularly comes up with new investment ideas, many of which are unique. The latest of these is… read more here