IEEFA update: Amid the global economic crisis, utility-scale wind and solar continue to be seen not just as a long-term investment but one for the near term as well.
Writing from Australia this week, my colleague Bruce Robertson notes that two big energy companies—Origin and Santos—are pulling back on oil and gas capital spending but forging ahead on renewable energy investments. Robertson reports also that Acciona, a Spanish multinational, is proceeding with construction of a $1.2 billion 1-gigawatt wind farm in Queensland.
Similar developments are evident in the U.S. as well. The old electricity-generation model has been giving way to a new one over the course of a decade, and capital markets have been moving accordingly.
The Wall Street Journal summed up investor sentiment last week under the headline: Wind, Solar Farms Are Seen as Havens in Coronavirus Storm. The article cited the sector’s “low-risk stable yield opportunities at a time of extraordinary market volatility,” noting that utility-scale renewable projects are typically tied to long-term power purchase agreements that assure steady revenues.