Private and public investments in renewable energy sources are poised for serious growth in the next few years, due to a combination of urgent need and growing opportunities.
While the path to limiting global warming to 1.5 degrees Celsius continues to narrow, "clean energy growth is keeping it open," the International Energy Agency said in its September update.
IEA expects a record $1.8 trillion in clean energy investments in 2023 alone, and said that it needs to be $4.5 trillion each year in less than a decade, to stay on the net-zero pathway.
For institutional investors, renewable energy was already on a robust path, with the International Renewable Energy Agency predicting that the global market for it will top $2 trillion by 2030, up from $856 billion in 2021.
One of the earliest investors has been the Canada Pension Plan Investment Board, Toronto, which manages the assets of the C$570 billion ($417 billion) Canada Pension Plan. CPPIB President and CEO John Graham credited "solid returns on investments in renewable energy assets and infrastructure" for a positive performance in a challenging 2022 market.
CPPIB investments in green and energy transition assets are expected to reach at least C$130 billion by 2030 from C$67 billion currently, and "what we are doing in renewable assets is a big part of that," said Bill Rogers, head of sustainable energies for CPPIB, who expects the renewable energy market to stabilize over the next 18 months, after turbulence from energy crises, inflation and more.
Rogers expects three core renewable energy approaches to dominate: onshore wind, offshore wind and solar.
Other options for long-term investors interested in renewable energy continue to widen and to attract significant investor interest in alternative green technologies that include clean transportation, hydrogen, biofuels, battery storage and others.
