Clean renewable corporate investment strategy analysis

Global investments in clean renewable energy by international companies and corporations have risen strongly in recent year. These investments have taken place via different investment models and various channels for different companies. It has been estimated that the global investments in clean renewable energy have exceed USD1 trillion in the last decade. The annual investments in cleanenergy have also exceeded USD200 billion for the past seven years. A good example is that in 2016 the total new investment in renewable power and fuels was over USD260 billion in both emerging economies and developed countries (IRENA, Investments in Renewables Analysis, 2018).

Looking ahead, experts have predicted that the global clean renewable energy investments are expected to continue their strong upward trends. A good example is that the Chinese government has announced major renewable investment plans, as part of its 13th Five-Year National Plan, to spend USD360 billion on clean renewable energy projects through to 2020/2025. These clean energy investments should reinforce China’s position as the world’s leader in clean renewable energy investments (UNEP, Renewable Investment Global Trends Report, 2019).

Globally, most of the clean energy and renewable electricity investments have continued to be dominated by electricity power generation plants owned by big utilities or large investors. The scale of various clean energy power plants, including solar PV, wind power and CSP, has continued to increase with new technical innovations. Some of the key clean renewable power generation equipment have also continued to grow with technological advances and innovations. A good example is wind turbines which have continued to increase in size with new material advances and new technological innovations (REN, Renewables Global Status Report, 2018).

The leading utility companies in China, Denmark, Germany, India, Sweden and the United States have continued to invest in large-scale renewable energy projects, especially in solar PV and wind power. Interestingly, these leading utility companies have also started to, in some cases, invest in renewable energy technology companies as part of their innovation and technology drives.

International analysis has highlighted that some leading oil and gas companies which have traditionally been working in the fossil fuel sectors, such as oil, gas and coal, have also started to move aggressively into the clean energy and renewable energy sectors. Many leading energy companies have developed new clean renewable energy investment strategics and made major announcements globally. A good example is Shell which has announced its new clean renewable energy investment strategy, especially in the growing areas of new electric vehicle charging and offshore wind developments.

Globally, many major international corporations and institutions have also been making large commitments to purchase clean renewable electricity from different sources, including from emerging economies. Many leading businesses around the world have also joined the RE100 alliance. This is a global initiative of businesses which have committed to achieving a target of 100% renewable electricity in future. New RE100 corporate members have included major companies in China and India, as well as international heavy industrial corporates (RE100, Report and Briefings, 2019).

Many leading companies globally have been making major purchases of clean renewable energy as part of their new energy and power supply strategies. The bulk of these clean power purchases have been in renewables, such as wind

Renewable strategy management 185 energy and solar PV. Most of the international corporates have been procuring their renewable electricity through renewable energy certificates (RECs). Many major corporates have also increasingly entered into new power purchase agreements (PPAs) or applied new direct clean power ownership models.

An increasing number of large corporations have negotiated and committed to new power purchase agreements (PPAs) of unprecedented large sizes. Many of these PPAs have been contracts undertaken directly with renewable energy generator companies rather than with utility companies. A good example is that the overall volume of PPAs in 2016 has rose to 4.3 GW which was the second highest amount on record globally.

There have also been some interesting clean renewable energy community project investments in recent year. These involved investments by a growing number of local communities in new renewable projects in some countries. A good example is that Canada has seen its first community wind farm starting operation recently. Another good example is that Chile has been implementing a new dedicated policy for clean community energy projects since late 2015. Chile has now registered 12 new communities to receive investment funds for new community clean renewable energy projects.

However, the growths in community energy projects in some other countries have been declining. These included parts of Europe, Germany, the United Kingdom and Japan. A lot of these declines were caused by new clean energy policies shifting away from PITs towards competitive tendering. A good example is that in the United Kingdom over 40 community energy projects have stalled after new policy changes that have reduced tax benefits and FIT rates. Another good example is that in Japan renewable policy amendments that have removed priority access for renewable energies have meant that many community power projects would no longer be able to connect to Japan’s national electricity grids.

 
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