We believe that new energy and renewable energy generation is the most significant growth sector in the UK today. For the second year in a row, renewable energy accounted for more than half the new power generation capacity added worldwide (source: FT.com*) and continues to rise. The UK global renewable energy market has seen marked growth since 2003 and is expected to see ongoing growth as the UK Government pushes to meet new mandates.
Global energy demands continue to rise and total worldwide energy use is predicted to increase nearly 40% over the next 20 years, which would require huge supplies of fossil fuels. However, fossil fuels are non-renewable sources, which are depleting and are being phased out by many government mandates as they pollute the environment and contribute to global warming.
The UK is bound by the Climate Change Act which demands an 80% reduction in greenhouse gas pollution by 2050, and the UK is projected to spend £8.4bn on renewable projects in the UK in 2020-2021. In fact, the UK is a global leader in the clean tech revolution and has a target to meet 15% of its energy needs from renewable sources by 2020, up from 8% in 2015. To achieve this end, the UK is phasing out all coal power plants by 2025 and is replacing the new power needed by clean, renewable energy. September 2017 saw the opening of the UK’s first subsidy-free solar farm, demonstrating that solar can remain a commercially viable technology despite earlier government cuts to subsidies.
Gresham House New Energy predict that three key technologies will have a huge global impact on how trillions of dollars are spent on energy and transportation.
1. Energy Storage
More reliable and lower cost batteries are becoming the key driver for rising renewable energy and EV market penetration. On the grid, batteries smooth out intermittent generation, a problem that has become worse with the deployment of renewable energy on a large scale and the decommissioning of coal-fired power plants. We believe the battery market will be the new $1trn market of the 21st century. Gresham House New Energy is developing a series of “Energy Storage Systems” comprising batteries and engines to offer “Grid Enhancement” or grid balancing services to National Grid as energy generation in the UK is undergoing fundamental change.
2. Electric Vehicles
Electric cars are proving that they are the best design option through better quality and range – combined with lower running costs and emissions. Gresham House New Energy expects electric cars to represent c.50% of the new car market by 2025.
Solar is already the cheapest form of renewable energy in many parts of the world and becoming cheaper every year. Gresham House New Energy expects solar to provide a c.40% share of electricity by 2050.
Gresham House New Energy is among the leading operators of ground-mounted solar farms in the UK. The ground-mounted solar PV projects, whether currently managed, sold or permitted, totalled c.290MW across 28 solar projects. C.1,600 rooftop solar installations and c.300 small scale wind turbine sites are part of the VCTs which are now managed by Gresham House New Energy.
We believe renewable energy generation, the electrification of transport and energy battery storage are the sweet spots for investment opportunities today.