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Renewable energy sources as an investment trend

Recently one of the most attractive assets for the global investors became renewable energy. Herewith, it should be noted that this trend is actual both for the developed markets and for the countries with forming stage of economics.

The Fall of oil quotations, marked in 2014, became significant for renewable energy sources as RES proved that they could compete with hydrocarbons. This fact has broken the investors’ expectations, which have been temporizing and evaluating attractiveness of RES till that moment. It is worth to note that it became possible due to the systemic work of energy companies, which had been continuously developing the branch and achieving significant reduction in cost of electric power.

Already in 2014 the price reduction on equipment and technology development gave the opportunity to achieve facilities commissioning simultaneously with reduction of necessary investment volume. The analysts believe that this trend will keep over the next decade, thus the value of "conventional" electric power will slightly decrease, because the modernization of coal and gas power stations is capital-intensive.  Hence the specialists suggest that during next few years the developed countries will not only save the grid parity between traditional and solar energy, but also will achieve price priority of the energy generated by solar power stations. If you look at a longer period, it is possible to predict that fossil fuels will finally lose their competitiveness in comparison with wind and solar energy.

Renewable energy sources vs conventional power engineering

Another signal for investors became the decision of the largest financial institutes to refuse from financing conventional power engineering. In particular the representatives of the World bank announced about support of coal projects exclusively in the poorest countries of the world. Overall up to 2025 the investment volume into renewable energy sources will constitute $ 3 trillion.

It is necessary not to forget about such a trend as the pursuit to reduce emissions of carbon dioxide into the atmosphere; it became not only economic but also a political issue. The countries which set the similar task signalize the investors about their readiness to support renewable energy sources even in the case of oil price collapse.

Renewable energy sources increased value

All these factors have led to regular shares rise, allocated at the public market. During 2014 the sector value increased by 54%, and reached the level of general capitalization of $ 15,1. Thus the interest of exchange investors caused the shares climbed in total amount by $5 billion.

This situation became the precondition for penetration of renewable energy sources RES at new markets, where the investment volume increased by 36% and reached the volume of $ 131, 4 billion. For comparison the investment volume in RES in developed countries constituted $ 138, 9 billion. It appeared that unexpectedly attractive countries turned out to be such countries as Chili, South Africa, Kenya, Turkey, Mexico and Indonesia, each of them have attracted more than a billion of investments. Not far behind them are Panama, Philippines, Myanmar, Uruguay and Jordanian, where the investment volume in renewable energy sources ranged from half a billion to 1 billion USD. Overall total world investment volume in 2014 showed an increase of 17% compared to the previous one. In particular it is explained by the explosive growth of solar energy in Asia and commissioning the new line of shelf wind power station in Nordic countries and European Union.

Renewable energy sources: market trends

If to talk about how much these trends have touched the domestic market of RES, it is possible to resume that Ukraine has not been left behind. In 2014 the growth of facilities for renewable energy sources constituted 19% or 1462, 2 MW. The highest growth was fixed in the sphere of wind power energy (179, 81 MW). The volume of solar energy increased by 70, 53 MW, biomass – 18 MW, biogas – 7,32 MW, small hydro electric power plant – 4.96 MW. Total volume capacity of electric power energy, generated by the green rate is more than 2 billion per hour.

The Analysts of Ukrainian Biofuel portal believe that in perspective the renewable energy sources can provide half amount of the energy consumed in the country. At the same time the largest potential has biomass sector, where can be produced to 15000 GW. Talking about solar power stations, its real volume of generation can be increased by 2020 to 2420 GW per hour. It will give an opportunity to provide not only domestic consumer with solar power energy, but also direct for export about 70% of the capacities. Wind power energy is capable to give to the national network about 22 MW of capacities. All these predictions can be implemented on condition of execution of National plan of activities on renewable energy. According to it the foreseen volume of the necessary investments is $ 17 million.

Renewable energy sources: legislative aspect

Let us notice that despite the prolonged political and economic crisis, the situation at the domestic energy market has stabilized this year. In particular, the "green" tarifs were returned to the previous level and the Verkhovna adopted the draft law №2010 "About the amendments to some laws of Ukraine regarding competitive conditions on producing electric energy from renewable energy sources". This draft law allowed to cancel the essential requirement to the investors about local the component and now during projects realization the companies will independently define who among the producing countries is to be a supplier of the equipment.

All these measures along with the revision of the mechanism of state support of alternative renewable energy sources did not only restore the investors' confidence in the Ukrainian market, but also allowed to establish new plans on attracting foreign investments. It should be noted that the European Bank of Reconstruction and Development has recently announced about the possibility of increasing the investment volume into renewable energy sources of Ukraine up to $ 50 billion per year.

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