Why Renewables?

It is estimated that a quarter of the carbon emissions that contribute towards global warming are caused by the burning of fossil fuels. In response, the global energy markets are being transformed, with fossil fuel-based capacity being replaced by renewable energy.

The transformation is happening at an ever-increasing rate and is being driven by two factors. Firstly, the lowering cost of producing solar and wind energy makes it comparable or cheaper in cost than fossil fuels in many parts of the world. Secondly, governments are increasingly adopting long term support mechanisms to incentivise the generation of renewable energy to accelerate the transition.

Government Response

In the past two decades governments around the world have sought to incentivise investment into renewable energy by creating financial support mechanisms. Typically, generators of renewable energy were paid a fixed tariff for the green electricity produced for a 15-20 year period, regardless of the market price for the energy. This was necessary because, historically, the cost of producing renewable energy was higher than fossil fuels and investors needed an economic incentive to allocate capital into the sector.

 

Economics

The introduction of subsidies created a ‘virtuous circle’ of increased demand for renewable technologies, which in turn lowered the cost of manufacturing. Between 2010-2020 the cost of solar modules dropped by over 90%, and today, solar and wind energy are the two cheapest forms of energy for the majority of the world’s population. Cost reduction and government support have combined to drive the energy transition and it is likely to accelerate in the current decade.

 

Bluefield's Approach

Bluefield’s approach to creating, sustaining and maximising value to shareholders is a function of having expertise at every part of the investment cycle. There are five distinct disciplines and activities – development, investment, construction monitoring, asset management and operation and maintenance that enable Bluefield to control deployment, pricing, quality and long term value.

Please get in touch to understand more.