Positive investments

The Guardian reports on increased investment in alternative energy sources:

Big companies are also stepping up the pace of investment. In May, General Electric, the US conglomerate that makes products from jet engines to power generation, announced plans to double its annual investment in renewable energy technologies to $1.5bn (£816m) by 2010. In Europe, companies such as Spain's Iberdrola and Britain's Npower are making big investments in wind power projects...

According to New Energy Finance, a London-based energy research company, the second quarter of 2005 saw near-record levels of venture capital and private equity investment in the clean energy sector - some 45 deals worth an estimated $340m. "It is good to see that the number of renewable energy funds and the amount of money flowing into these funds is increasing," said Juliet Davenport, the chief executive of Good Energy, a UK supplier of 100% renewable electricity. "The renewable generation market is at an important stage in its development; it needs the continued support of the consumer, investor and government to ensure that it reaches its potential and really starts to make a difference to climate change."

Currently, only around $20bn a year is invested worldwide in renewable energy capacity; mainly wind and solar, with some in biomass and biofuels. A further $5bn is spent on research each year, particularly into hydrogen and fuel cells. But that figure is bound to grow. New Energy Finance expects the figure to increase to over $100bn within a decade - a sustained compound annual growth rate of 15-20%. That means there will be opportunities to make money provided investors make the right choice.

Now should be the time for pension funds and (especially) ethical investment funds to take a serious look at large-scale investments in renewable energy, as social responsibility intersects with high investment potential. It's unfortunate that it's taken this long for renewable energy to become a top investment option, particularly when some of the delay can likely be traced to government subsidies of the non-renewable alternatives. But however late it is, at least some investors are starting to look in the right direction - and the most influential ones should soon follow.