Investing in renewable energy

Introduction

Investing in renewable energy continues to be relevant for both individual and institutional investors, with decarbonisation and energy security remaining high on the agendas across most of the European political spectrum. Investors can access renewable energy investments through several avenues, including investment companies such as The Renewables Infrastructure Group (TRIG). Renewable energy infrastructure offers not only significant environmental benefits, but also the potential for attractive shareholder returns. This page guides you through the fundamentals of the sector.

Renewable energy revenues

Renewable generation assets make their revenues by selling the clean electricity produced by projects. These revenues can broadly be split into two categories:

  • Fixed revenue: This refers to when a project has an agreement to sell power at a fixed price. These can be through government subsidies and incentives and/or arrangements to fix the electricity price with third parties.
  • Merchant (or Wholesale revenue): This refers to when a project’s revenues are wholly exposed to the market power price. The market price of electricity can be volatile and is affected by a variety of factors including the generation mix of the grid.

To manage risk, TRIG seeks to balance its exposure to both of these revenue types.

FAQ

What is renewable energy?

Renewable energy, also referred to as ‘green energy’ or ‘clean energy’ is derived from natural resources that are continually replenished such as the sun and the wind. Renewable energy sources can be harnessed again and again without running out, unlike fossil fuels which take millions of years to form and cannot be replenished when used.

Which types of infrastructure produce renewable energy?

Renewable energy sources can be harnessed at scale by renewables infrastructure assets to produce clean energy, the main established technologies include:

  • Wind farms: Wind turbines are used to capture the wind’s kinetic energy. Rotating blades turn a generator which creates electricity. Wind farms are operated both onshore and offshore.
  • Solar Photovoltaic (Solar PV) farms: Solar panels are used to convert sunlight directly into electricity.
  • Flexible capacity projects: Generation technologies which store energy and respond to electricity demand levels and pricing signals, such as batteries, pumped hydro storage and green hydrogen.

Use of these technologies in place of fossil fuels reduces greenhouse gas emissions, decreases air pollution, mitigates climate change, and lessens dependence on non-renewable resources.

How is diversification helpful?

Different renewables technologies have different generation profiles, and where these assets are located can impact energy yield and regulatory support. Diversifying a renewable energy portfolio by across different geographies and technologies can help to reduce risk by limiting exposure to any one location or asset type and in doing so smooth the return profile of the portfolio as a whole.

How can I invest in renewable energy infrastructure?

Given the complexities of direct investment into renewable energy infrastructure, a convenient way for many individuals to invest in the sector is through investment companies such as TRIG, which provides access to a portfolios of renewables assets.

What is The Renewables Infrastructure Group?

The Renewables Infrastructure Group (referred to as “TRIG”) is a listed investment company. TRIG owns a large, diversified portfolio of renewable energy investments across the UK and mainland Europe, providing investment exposure to established renewables technologies. The Company’s purpose is to create shareholder value from a portfolio of renewable energy generation and supporting infrastructure, contributing towards a cleaner and more secure future.

The Company’s shares are traded on the London Stock Exchange under the ticker “TRIG” and can be acquired through a stockbroker or other financial intermediary. See the ‘How to invest in TRIG’ page for more information: https://www.trig-ltd.com/investors/how-to-invest-in-trig/

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