A Point in Principle

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Adam Barber
May 2, 2013
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This content is from our archive. Some formatting or links may be broken.
A Point in Principle

It might be a just a ‘statement of intent’ at this stage, but the disclosure by the Green Investment Bank and Abu Dhabi’s state-backed renewable energy investment business, that they intend to jointly invest up to £1billion into the UK clean energy sector is clearly good news.

It’s not the first time that Masdar has taken a stake in UK projects, with the fund having already invested over £500million in an equity stake in the London Array wind farm.

Of course, for sovereign wealth funds likes Masdar, or Chinese state development banks, renewable energy investments can carry a different risk profile. Sometimes these investments are made for political capital, sometimes to hedge against other assets in a portfolio and of course sometimes because the returns genuinely warrant it.

Making the case to the traditional investment community, the private equity and pension funds, is of course a lot harder. These firms all answer to investors with slightly smaller pockets than the oil sheiks and the Chinese state and, more than often than not, are looking for a return on investment in under 30 years.

But, there’s a point in principle. Clean energy, and wind in particular can be marketed as a suitable alternative to traditional assets or other energy companies.

The question is, do we in the wind industry market it well enough? Too often it seems we’re fighting a reactive battle, constantly trying to prove that wind is a viable technology, let alone a suitable investment proposition.

The industry is very good at talking internally as to why it is a safe bet for investment – many of the conference sessions are testament to that – but not so good at convincing the markets.

This needs to change. Wind energy cannot go the same way as the carbon market, an investment that despite being propped up with a floor price, still can’t be made to work.

It isn’t necessarily a simple answer, but perhaps it’s about time the industry started to think a little more collectively about the story it is trying to tell.

Becoming more proactive, building relationships with the markets and moving the discourse on from always fighting the last battle is not just a nice to have, it's imperative.

It might be a just a ‘statement of intent’ at this stage, but the disclosure by the Green Investment Bank and Abu Dhabi’s state-backed renewable energy investment business, that they intend to jointly invest up to £1billion into the UK clean energy sector is clearly good news.

It’s not the first time that Masdar has taken a stake in UK projects, with the fund having already invested over £500million in an equity stake in the London Array wind farm.

Of course, for sovereign wealth funds likes Masdar, or Chinese state development banks, renewable energy investments can carry a different risk profile. Sometimes these investments are made for political capital, sometimes to hedge against other assets in a portfolio and of course sometimes because the returns genuinely warrant it.

Making the case to the traditional investment community, the private equity and pension funds, is of course a lot harder. These firms all answer to investors with slightly smaller pockets than the oil sheiks and the Chinese state and, more than often than not, are looking for a return on investment in under 30 years.

But, there’s a point in principle. Clean energy, and wind in particular can be marketed as a suitable alternative to traditional assets or other energy companies.

The question is, do we in the wind industry market it well enough? Too often it seems we’re fighting a reactive battle, constantly trying to prove that wind is a viable technology, let alone a suitable investment proposition.

The industry is very good at talking internally as to why it is a safe bet for investment – many of the conference sessions are testament to that – but not so good at convincing the markets.

This needs to change. Wind energy cannot go the same way as the carbon market, an investment that despite being propped up with a floor price, still can’t be made to work.

It isn’t necessarily a simple answer, but perhaps it’s about time the industry started to think a little more collectively about the story it is trying to tell.

Becoming more proactive, building relationships with the markets and moving the discourse on from always fighting the last battle is not just a nice to have, it's imperative.

It might be a just a ‘statement of intent’ at this stage, but the disclosure by the Green Investment Bank and Abu Dhabi’s state-backed renewable energy investment business, that they intend to jointly invest up to £1billion into the UK clean energy sector is clearly good news.

It’s not the first time that Masdar has taken a stake in UK projects, with the fund having already invested over £500million in an equity stake in the London Array wind farm.

Of course, for sovereign wealth funds likes Masdar, or Chinese state development banks, renewable energy investments can carry a different risk profile. Sometimes these investments are made for political capital, sometimes to hedge against other assets in a portfolio and of course sometimes because the returns genuinely warrant it.

Making the case to the traditional investment community, the private equity and pension funds, is of course a lot harder. These firms all answer to investors with slightly smaller pockets than the oil sheiks and the Chinese state and, more than often than not, are looking for a return on investment in under 30 years.

But, there’s a point in principle. Clean energy, and wind in particular can be marketed as a suitable alternative to traditional assets or other energy companies.

The question is, do we in the wind industry market it well enough? Too often it seems we’re fighting a reactive battle, constantly trying to prove that wind is a viable technology, let alone a suitable investment proposition.

The industry is very good at talking internally as to why it is a safe bet for investment – many of the conference sessions are testament to that – but not so good at convincing the markets.

This needs to change. Wind energy cannot go the same way as the carbon market, an investment that despite being propped up with a floor price, still can’t be made to work.

It isn’t necessarily a simple answer, but perhaps it’s about time the industry started to think a little more collectively about the story it is trying to tell.

Becoming more proactive, building relationships with the markets and moving the discourse on from always fighting the last battle is not just a nice to have, it's imperative.

It might be a just a ‘statement of intent’ at this stage, but the disclosure by the Green Investment Bank and Abu Dhabi’s state-backed renewable energy investment business, that they intend to jointly invest up to £1billion into the UK clean energy sector is clearly good news.

It’s not the first time that Masdar has taken a stake in UK projects, with the fund having already invested over £500million in an equity stake in the London Array wind farm.

Of course, for sovereign wealth funds likes Masdar, or Chinese state development banks, renewable energy investments can carry a different risk profile. Sometimes these investments are made for political capital, sometimes to hedge against other assets in a portfolio and of course sometimes because the returns genuinely warrant it.

Making the case to the traditional investment community, the private equity and pension funds, is of course a lot harder. These firms all answer to investors with slightly smaller pockets than the oil sheiks and the Chinese state and, more than often than not, are looking for a return on investment in under 30 years.

But, there’s a point in principle. Clean energy, and wind in particular can be marketed as a suitable alternative to traditional assets or other energy companies.

The question is, do we in the wind industry market it well enough? Too often it seems we’re fighting a reactive battle, constantly trying to prove that wind is a viable technology, let alone a suitable investment proposition.

The industry is very good at talking internally as to why it is a safe bet for investment – many of the conference sessions are testament to that – but not so good at convincing the markets.

This needs to change. Wind energy cannot go the same way as the carbon market, an investment that despite being propped up with a floor price, still can’t be made to work.

It isn’t necessarily a simple answer, but perhaps it’s about time the industry started to think a little more collectively about the story it is trying to tell.

Becoming more proactive, building relationships with the markets and moving the discourse on from always fighting the last battle is not just a nice to have, it's imperative.

It might be a just a ‘statement of intent’ at this stage, but the disclosure by the Green Investment Bank and Abu Dhabi’s state-backed renewable energy investment business, that they intend to jointly invest up to £1billion into the UK clean energy sector is clearly good news.

It’s not the first time that Masdar has taken a stake in UK projects, with the fund having already invested over £500million in an equity stake in the London Array wind farm.

Of course, for sovereign wealth funds likes Masdar, or Chinese state development banks, renewable energy investments can carry a different risk profile. Sometimes these investments are made for political capital, sometimes to hedge against other assets in a portfolio and of course sometimes because the returns genuinely warrant it.

Making the case to the traditional investment community, the private equity and pension funds, is of course a lot harder. These firms all answer to investors with slightly smaller pockets than the oil sheiks and the Chinese state and, more than often than not, are looking for a return on investment in under 30 years.

But, there’s a point in principle. Clean energy, and wind in particular can be marketed as a suitable alternative to traditional assets or other energy companies.

The question is, do we in the wind industry market it well enough? Too often it seems we’re fighting a reactive battle, constantly trying to prove that wind is a viable technology, let alone a suitable investment proposition.

The industry is very good at talking internally as to why it is a safe bet for investment – many of the conference sessions are testament to that – but not so good at convincing the markets.

This needs to change. Wind energy cannot go the same way as the carbon market, an investment that despite being propped up with a floor price, still can’t be made to work.

It isn’t necessarily a simple answer, but perhaps it’s about time the industry started to think a little more collectively about the story it is trying to tell.

Becoming more proactive, building relationships with the markets and moving the discourse on from always fighting the last battle is not just a nice to have, it's imperative.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.