The world of renewable energies has always been foreign to me. The time has come to learn about this energy revolution.
Exploring Renewables
First, some recommended readings from industry experts on the energy market:
Reading into the data, fossil fuels are the dirtiest and most dangerous energy source, whilst renewables are both the safest and cleanest. What makes renewables appealing is that they are also getting cheaper. And as new technologies come out, this will further drive costs down and productivity up. In addition, Russia’s invasion of Ukraine is making countries aware that renewables are not just about climate change and costs, but a matter of national security and energy independence.
Have a look at these stats which present the UK’s energy profile. You can play with the data and compare it with other countries. The stats show that the UK’s energy consumption (electricity, transport and heating) was 90%+ reliant on fossil fuels back in 2010; today that figure stands closer to 75%. A trend seemingly heading in only one direction.
As for the UK government’s ambitions, it is going full steam ahead. The UK aims to be carbon neutral by 2050 and this will require capital and resources. So far, the government has pledged £90 billion (by 2030) which is to include £1 billion on the electrification of UK vehicles, £3.9 billion for decarbonising buildings, and £1.5 billion on R&D for green technologies. It is early days and there will be bumps on the way. A current issue is rising costs for wind farms and how far the government is ready to subsidise these.
Any delays or cancellations to projects that were procured through the auction would represent a big setback to the UK government’s efforts to meet climate targets and improve security of supply by increasing domestic energy sources following Russia’s invasion of Ukraine.
For a deep dive into the UK’s net zero plan read here. For an analysis of the future of the global energy economy read here. People to follow are Hannah Ritchie, the queen of sustainability stats. Brendan Wallace who is leading the way in VC investments in climate tech. And Neil deGrasse Tyson for everything science and the universe.
Now, looking into real estate and regions to look out for.
Logistics. This includes the need for the production of renewable batteries and sustainable transport, innovation from specialist asset managers in commercial transport, and occupiers showcasing their sustainability initiatives. A common theme is the electrification of transport and is something to look out for.
Vacant / Secondary Offices. The office market is going through one of its biggest transitions ever. WFH is here to stay and there is a massive oversupply of secondary offices. If these are not brought to Grade A spec, converted to residential, or to alternative uses, these derelict buildings serve little purpose. Surely, there must be ways to utilise these spaces within the renewables sector, whether that be battery storage or solar panels.
Middle East. The region with the most at stake. Being so oil dependent, there is no surprise the Gulf nations are taking action and diversifying into renewables. A smart move acknowledging the transition away from their black gold and a region to look out for.
China. Another region with a lot at stake. Their issue is not an over-reliance on fossil fuels, but rather how much of it they consume. This comes at a heavy price with high pollution levels and detrimental effects on its population. This Bloomberg documentary gives an insight into the scale of China’s fossil fuel consumption and the sheer amount they are spending on transitioning into renewables.
Final Thoughts
This is the first time I have researched renewable energies. What originally felt like a “niche” topic within the energy/infrastructure sector, I could not be more wrong. It is a revolutionary shift and will affect all industries and all nations.
By educating ourselves and getting involved, not only do we play our part in making our cities and buildings more sustainable. We also play our part in leaving our planet a better place than we found it.
Hope you enjoyed this article. I would love to keep the conversation going, drop me an email.
A couple of thoughts from the past month:
Finally some good news in EU/UK relations. The latest trade deal regarding Northern Ireland seems to be positive for most parties involved.
If you are looking to learn about the new world of rising interest rates, look no further - Sea Change, Howard Marks.
Twitter Thread about office to residential conversion.