Renewable Spending. Global renewable investment is set to reach $2.6 trillion by the end of this decade, according to a report released by the U.N. Environment Program. This figure is more than triple the amount from the previous decade. This increase in spending stems from a reduction in the price of vital materials and lower interest rates in the primary economies. All of the major renewable energy sources saw a decline in their overall cost, with solar photovoltaics down 81% and wind power reduced about 45%. With renewable energy becoming more common and spending consistently increasing, companies within the sector will hopefully start to reap the benefits.

New Options for Investors. The dramatic shift to renewable energy opens more doors for investors. The change has not been as fast as some had hoped for, but those data now clearly indicate the shift is taking place. Lenders who may have been unsure if the move would occur now have the reassurance and opportunity to get into the sector. Although investing in renewable energy presents unique challenges, many options and ways to diversify your portfolio are available. Not only are there ETFs and mutual funds, but there are also many small and micro-cap companies making steady progress.

Decline of Oil Demand. In the first five months of 2019, oil demand grew the weakest pace since 2008. In May, demand for crude outright fell, marking the second year-over-year decline in 2019. The oil market has seen a rush of investors selling in response to demand fears and continued trade tensions. Brent crude, the benchmark price for purchases of oil worldwide, officially entered a bear market at the beginning of August, meaning it declined more than 20% from recent highs. The International Energy Association announced oil demand in developed nations has declined for three consecutive quarters, which has not happened since 2014. Fossil fuel entities will have to find a way to counteract the decline in demand while we are globally moving toward more renewable energy sources.

Change Can be Good. With global CO₂ emissions continuing to rise, nations are searching for ways to provide clean energy to their residents. Renewable energy, such as wind and solar power, have been gaining momentum and spending as the world tries to make the change. Oil demand has declined but still accounts for well over half of the world’s power. 

Sources:

https://af.reuters.com/article/energyOilNews/idAFL5N25U2O1, Nina Chestney, September 5, 2019

https://www.cnn.com/2019/08/09/investing/oil-demand-iea-trade-war/index.html, Matt Egan, August 9, 2019

https://money.usnews.com/investing/stock-market-news/articles/2019-03-15/4-tips-to-invest-in-renewable-energy-now, Kayleigh Kulp, March 15, 2019