High investor interest in Renewable Energy

This year, global demand for energy may experience its sharpest decline in 70 years. However, investors’ demand for renewable energy companies are soaring.
After seeing a sharp decline in March, renewables have picked up even more steam in the past six months. Analyst Haakon Amundsen at ABGSC doesn’t think the trend is necessarily driven by the Covid-19 pandemic.
“Renewable energy is getting a lot of investor attention right now, spurred on by more direct government initiatives to reduce CO2 emissions and by consumer behaviour. This trend is also clearly reflected on the stock market over the last two years,” says Amundsen.
This summer, Amundsen paired up with John Olaisen, Karl Fredrik Schjøtt-Pedersen and three other analyst spread across ABG’s Nordic offices, to create a new Renewable energy team at ABGSC. All the three Norwegian members of the team are experienced energy analysts, and together they track the sector closely.
It’s a booming industry. Last year, renewable energy accounted for almost two-thirds of the increase in the power sector, and the capacity of green energy has grown 8 percent annually over the past 10 years, according to a study by Imperial College London and the International Energy Agency (IEA).
“The global push to increase renewable energy’s portion of the global energy mix can be seen in many parts of society; among consumers, investors, companies and politicians. This summer, the EU approved the biggest green stimulus package in history, and the Norwegian government just announced its support for the first full-scale CCS (carbon capture and storage) project. Strong industry growth prospects and a positive environmental footprint clearly makes for attractive a lot of investment opportunities“, says Olaisen.
Schjøtt-Pedersen sees an ongoing shift in the energy market. “While we believe that oil and gas will remain an important part of the energy mix for years to come, increased focus on environmental footprint has resulted in a push for investors to look for green investment opportunities and this is evident in the increasing value of these stocks,” he says.
In the renewable space, hydrogen has been rewarded the highest on the stock market over the last two years, followed by solar and wind.