Introductory Chapter: Sustainable Energy Investment and the Transition to Renewable Energy-Powered Futures

“Sustainable energy investment” is a widely used phrase and concept in the fields of finance, engineering and economics. Typically, it focuses on evaluating renewable power development and includes assessments of political and regulatory risks, energy risk hedging and portfolio diversification. Often publications on this topic contribute to the climate change response agenda: promote investments in solar- or wind-powered technologies in order to realize a more equitable, sustainable and prosperous future; evaluate financial aspects of carbon budgeting and energy asset risk management; and respond to financial and climate risks associated with mitigation and adaptation policy interventions. Policymakers and energy regulators correctly perceive climate change to pose threats to energy assets, research and development (R&D), technological innovation to accelerate energy transitions and these impacts are projected to grow in the coming decades.

Concurrently, the energy sector is experiencing a myriad of challenges, from aging infrastructure, retiring workforces, years of stagnant investment to the need to attract new investment in smart grid resilience, business model innovation reforms, changing customer expectations, and more recently COVID-19 forced disruptions.

To mitigate the worst possible impacts, attention is now shifting to strategies for de-risking energy investments—for example, long-term climate-risk hedging and adaption strategies in energy infrastructure development around financing, costs, and revenue—to foster local, national and supranational systems of resource autonomy and reduce the risks of climate change. Read more>>

Photo credit: IRENA’s World Energy Transitions Outlook