Growth Strategies?

[colin]

If we are addressing future growth areas for energy production then just from what I hear on the radio I would have thought that offshore wind is the way forward .

[BusyBumbleBee]

What does your research tell you about the relationship between energy prices-recessions-and the return from renewable energy ITs? regards Colin

It tells me this

a) total return is a combination of SP price increase and dividends. So as renewable energy ITs have huge potential to increase NAV - see my earlier post - and the dividends are linked to RPI I conclude the future is bright. My total return this year to date (9 months) is 8.7% and since April 2016 37% (both on a unitised basis)

b) We are trying to phase out coal completely and our nuclear programme is not going well so there is a very tight supply from the generators. This is likely to get worse in the near future.

c) We are bringing in electric cars which use about one third of a KWHour per mile travelled - more if you've got a heavy foot or a Tesla

d) heat pumps are becoming more and more popular and require elecricity to replace more expensive oil. Installations are increasing see here https://www.gov.uk/government/statistic ... ember-2018

e) Even in a recession there is still a high demand for electricity and likely to get higher - see c) and d) above

f) the generators tend to negotiate forward prices for several years ahead giving stability to the price they receive and are largely immune to day to day spot market pricing.

Hope this answers your question - regards - BBB

[TUK020]

It tells me this

a) total return is a combination of SP price increase and dividends. So as renewable energy ITs have huge potential to increase NAV - see my earlier post - and the dividends are linked to RPI I conclude the future is bright. My total return this year to date (9 months) is 8.7% and since April 2016 37% (both on a unitised basis)

b) We are trying to phase out coal completely and our nuclear programme is not going well so there is a very tight supply from the generators. This is likely to get worse in the near future.

c) We are bringing in electric cars which use about one third of a KWHour per mile travelled - more if you've got a heavy foot or a Tesla

d) heat pumps are becoming more and more popular and require elecricity to replace more expensive oil. Installations are increasing see here https://www.gov.uk/government/statistic ... ember-2018

e) Even in a recession there is still a high demand for electricity and likely to get higher - see c) and d) above

f) the generators tend to negotiate forward prices for several years ahead giving stability to the price they receive and are largely immune to day to day spot market pricing.

Hope this answers your question - regards - BBB

BBB,
good summary of why moving to a Low Carbon future will increase demand for electricity.
Everyone tends to focus on the implication for generation.
There is also a significant impact on the transmission and distribution networks, which will require investment to uplift capacity
tuk020

[BusyBumbleBee]

There is also a significant impact on the transmission and distribution networks, which will require investment to uplift capacity -- tuk020

Which is why on shore wind, solar, small hydro, etc get a premium as their output goes into the 'local grid' and doesn't need to go for long distance use over the main part of the grid.