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Alternatives

Renewables the hot infrastructure bet as supply outpaces demand

Renewable energy infrastructure deals raised $32.6 billion in 2018 and made up 57% of all private infrastructure deals. By comparison, non-renewable deals raised $12.3 billion, and accounted for only 12% of all infrastructure deals.

Much of the interest in these deals has been driven by global clean energy initiatives such as the U.N.'s Sustainable Development Goals that aim to reduce carbon emissions. As more, particularly large industrial countries begin to commit to lowering their carbon footprint, the need for this infrastructure will grow. Investors have been observed increasing their infrastructure allocations as renewables offer a new diversification option beyond typical transportation and logistics-focused assets.

However, a look at the supply and demand of renewable energy in the U.S. suggests that production is moving too far ahead of demand. In 2018, a net positive 204 trillion British thermal units of renewable energy were produced in the U.S. despite the rapid growth of both the renewable energy produced and consumed.