December 19, 2019 Read More →

Global capital moving towards renewables, away from coal


The latest climate talks in Madrid achieved very little, with the world’s governments making glacial progress on the task of cutting greenhouse gas emissions to avoid climate catastrophe.

But outside the talks, investors are voting with their dollars as money flees fossil fuels and migrates to clean energy.

The policy shift at one of the world’s biggest and most powerful investment banks is a sign of the times.

This week, Wall Street behemoth Goldman Sachs announced it had ruled out direct finance for new or expanding thermal coal mines and coal-fired power plant projects worldwide, as well as direct finance for new Arctic oil exploration and production.

So significant is the shift in global financial markets, some believe the world is at a watershed moment.

“The world could well look back on 2019 as the tipping point,” argues a new report released today by the Institute for Energy Economics and Financial Analysis (IEEFA).

“[The moment] when global capital markets accepted the technology-driven inevitability [of a] crossover from polluting thermal coal and increased uptake of sustainable clean renewable energy.”

Across the globe, the value of clean energy companies is soaring, while the stock of businesses that make their money from fossil fuel energy is in sharp decline.

The picture in Australia is stark.

Major listed coal companies have all “destroyed significant shareholder value over the year”, the report notes, with Whitehaven Coal’s shares down 37 per cent, Yancoal Australia down 18 per cent and New Hope Corp down 37 per cent.

This at a time when the wider Australian market posted a 20 per cent rise.

In North America, share prices have soared for NextEra Energy, up 38 per cent, and Brookfield Renewable Partners, up 79 per cent, the report found.

In the European Union, over five years, the share prices of renewable energy leaders are up even more: EDPR by 90 per cent, Orsted a whopping 217 per cent and ENEL, 86 per cent.

IEEFA’s Tim Buckley acknowledges that coal use in power generation will continue for a couple of decades, with China, India and other countries in emerging markets still commissioning new plants today.

“The power of financial markets [is] to look ahead to the end game even as technology disruption of energy markets is only now becoming probable.

“It will take decades to play out, but the equity market isn’t waiting around.”

[Stephen Long]

More: Goldman Sachs abandons coal as investors look to low-emissions future

Posted in: IEEFA In the News

Comments are closed.