Sustainable energy (Themes Trading)
Total worldwide energy usage is expected to grow by nearly 50% by 2050, according to the US Energy Information Administration. Demand for renewable energy sources from most market segments is exploding…
…and is predicted to accelerate in 2022. To meet the growing global demand without falling back on fossil fuels, some serious spending on infrastructure, research and technology is required.
In 2021 alone, an estimated $750 billion was spent on clean energy technologies, a sum deemed not nearly enough to put the energy system on a sustainable path. As government and private sector spending increases to address climate change and support environmental, sustainability and governance considerations, investors will see holdings grow along with demand.
Laterst moves
In 2021, the renewable energy industry showed remarkable resilience after 2020 gave way to unprecedented demand.
Despite supply chain constraints, increased shipping costs and rising prices for key commodities, renewable energy prices have fallen more quickly than the industry anticipated and are fast becoming cheaper than fossil fuels.
The sector was given a further boost at COP26 when 197 countries agreed to the Glasgow Climate Pact. A much-needed supplement to the Paris Agreement, the pact is the first climate agreement explicitly planning to phase down unabated coal power generation. It’s also the first time that the need for a rapid reduction of coal and other fossil fuels has been acknowledged in a UN climate talks declaration.
The Biden administration’s green energy plan, which includes $2 trillion of investments, aims to fully decarbonise the power sector by 2035, followed by the nation achieving a net-zero carbon economy by 2050. This bold strategy will likely spur on further growth, particularly if proposed legislation is enacted. Growth of the solar industry in particular is projected for 2022 as related technologies become more cost effective. Over the past decade, solar photovoltaic (PV) systems that produce electricity from sunlight have declined in cost by 85%, making this one of the most cost-effective resources available today.
Solar-plus-storage buildouts, exploring floating solar PV modules, and expanding community solar projects to new markets are some of the expected developments over the coming year.
Outlook 2022
There’s no doubt that sustainable energy is the way of the future, supported by the international goal of limiting future warming to 1.5 degrees Celsius. The increased focus of investments on renewables will see related jobs reach 42 million globally by 2050, which is four times the current number. The global renewable energy market is expected to continue its upward growth to reach a valuation of $1.1 trillion by 2027.
SUSTAINABLE ENERGY THEMES TRADING
ISIN CH0385843732
Valor 038584373
Symbol SQBCEU
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