Internationally renowned law firm: Investors have increased their interest in photovoltaics and energy storage

Nov 29, 2021

An investigation report recently released by a well-known international law firm shows that as the global energy transition accelerates investment from fossil fuels to clean energy, investors are eager to transfer their funds to battery energy storage systems and photovoltaic projects. Despite the hype, investors' enthusiasm for hydrogen energy investment seems to have weakened.

This report details the changing trends of investor interest. Ashurst Law Firm surveyed thousands of senior executives from the Group of Twenty (G20), including Australia, who participated in corporate investment decisions. The average annual turnover of their companies was US$8.8 billion (A$12.2 billion).
The survey shows that in the past 12 months, investor interest in battery energy storage systems and photovoltaic projects has surged. Most of the investment opportunities are in North and South America, while the UK and Australia are lagging behind.
The report states: “In terms of current and expected investments in renewable energy, energy transition and decarbonization technologies, the North American market continues to lead. The South American market is closely by the South American market, which has exceeded the results of our 2020 study. The Middle East. Investment activities in the Americas market are increasing rapidly, while the investment intentions of respondents in other markets (including Australia and the United Kingdom) are somewhat lagging behind these markets. This may reflect the higher growth in the American and Southeast Asian markets. Chance."
In the survey conducted in 2021, two-thirds (67%) of investors indicated that they have invested or are planning to invest in energy storage technology, while in the 2020 survey, this proportion is less than half (47%). ). Battery energy storage system is the energy storage technology of choice for investors, and investors are attracted by the rapid increase in its performance and cost.
There has also been a similar surge in investor interest in photovoltaic projects, with 69% of respondents indicating that they have or are considering investing in photovoltaic projects, up from 52% a year ago. However, the growth of investor interest in all clean energy technologies is not consistent. The proportion of investors planning to enter the hydrogen energy field has dropped from 40% in 2020 to 31% in 2021.
In recent years, due to the potential of hydrogen energy to provide storable and flexible zero-emission energy, investors' interest in hydrogen energy has surged. However, hydrogen energy will face competition from other clean energy technologies in certain industries, especially in the transportation and other industries. Electric vehicles are regarded as the most likely technology winners.

Investor interest in onshore wind power projects has declined, and one-third (33%) of investors hope to maintain their market share, down from 42% a year ago.

However, in general, due to technological progress and increasing pressure from investors to implement climate-friendly investment policies, investors still hope to transfer funds to industries that will benefit from the energy transition.

Although the new crown epidemic has occurred, it seems to have little impact on investors' investment in response to climate change. And now more investors say that compared with the pressure from government departments or advocacy groups, they feel the pressure from competitors, customers and suppliers to switch to clean energy investment.

Paul Curnow, director of energy for the Asia-Pacific region of Ashurst Law Firm, said that sustainable technological improvements can help increase investor confidence in clean energy technologies.

Curnow said, “Investors’ confidence in clean energy technologies is growing and they are increasing their willingness to invest. However, as our research has investigated, the availability of greenfield development and the availability of appropriately skilled labor will also affect business strategies.

Our research shows that as institutional investors, asset management companies, and financial institutions including the central bank increasingly set the pace and direction of net-zero investment, companies in many markets have already taken the lead in government policies and regulatory systems. Front.

As we move towards a carbon-neutral world, many companies clearly need to develop new business models. They also need clear policy guidance from the government to plan for the future of clean energy. "

The survey found that most investors want to accelerate the flow of investment from the fossil fuel industry to the clean energy industry. More than two-thirds of the interviewed companies stated that they have set a zero-emission target, and 29% of the companies said they are developing zero-emissions. Target.