All you need to know about investment in Green Energy Infrastructure

Green Energy Infrastructure

The best chance we have at building a sustainable and fair future is to invest in green energy infrastructure

Introduction

The world is facing an increasing energy demand, while the negative impacts of traditional energy sources on the environment and climate change are becoming more evident. Therefore, it is critical to shift towards renewable energy sources to meet energy demands while reducing greenhouse gas emissions.
As a source of energy, green energy often comes from renewable energy technologies such as solar energy, wind power, geothermal energy, biomass, and hydroelectric power. To be deemed green energy, a resource cannot produce pollution, such as is found with fossil fuels. This means that not all sources used by the renewable energy industry are green

According to one definition, “green infrastructure” is “a strategically planned network of natural and semi-natural areas with other environmental features, designed and managed to deliver a wide range of ecosystem services, while also enhancing biodiversity.” For instance, providing better air quality, creating recreational spaces, and assisting with climate mitigation and adaptation are some examples of these services. The state and connectedness of natural regions, as well as the health and standard of living of the populace, are all improved by this network of green (land) and blue (water) places. Creating green infrastructure can also help the green economy by generating jobs.

Green energy is important for the environment as it replaces the negative effects of fossil fuels with more environmentally friendly alternatives. Even when the full life cycle of a green energy source is taken into consideration, it releases far fewer greenhouse gases than fossil fuels. It can also lead to stable energy prices as these sources are typically produced locally and are not affected by geopolitical crises, price spikes, or supply chain disruptions.

Overview of Green Energy Infrastructure

The globally renewable energy industry was assessed at USD 1.1 trillion in 2022, with a compound annual growth rate (CAGR) of 16.9% expected from 2023 to 2030.

The global renewable energy market size and growth

The global renewable energy market was valued at USD 768.9 billion in 2021 and is projected to grow at a compound annual growth rate (CAGR) of 16.6% from 2022 to 2030. The energy generation market has witnessed growth in terms of the installed capacity of renewable sources in the past few years on account of growing environmental concerns coupled with pressure to reduce the harmful effects of greenhouse gases. (Renewable Energy Market Size, Share, and Growth Report, 2030,n.d.) This has been a major factor in the expansion of the solar and wind energy sectors.

Investment trends and policies supporting the growth of green energy infrastructure

In 2020, the hydroelectric power segment was the largest revenue generator, and it is anticipated to grow at a CAGR of 6.5% during the forecast period. Renewable Energy Market, by End Use The residential segment acquired the top position in the global market in 2020, and it is anticipated to grow at a CAGR of 8.4% during the forecast period. (Chidanand et al., n.d.)
The total renewable energy installed capacity in 2020 was 535 GW, as per the European Commission, out of which 133 GW was from solar, 216 GW from wind, 134 GW from hydro, and 52 GW from bioenergy. The European Union has set a target to achieve 50% of its electricity consumption from renewable energy sources by 2030, out of which solar and wind energy will be major contributors. The large-scale integration of renewables is expected to be driven by increased interconnection capacity, and innovation in energy storage systems (“Push for Renewables,” 2022)
Global investment in green energy infrastructure has been steadily increasing in recent years, with significant growth seen in both developed and developing countries. According to the International Energy Agency (IEA), renewable energy investments in 2021 will reach $303.5 billion, representing an increase of 2% compared to the previous year. The growth was mainly driven by the expansion of solar, and wind energy technologies, with China, the United States, and Europe being the leading investors.

Future Outlook and Recommendations

Renewable energy sources now account for 25% of the global energy market. Renewable energy will account for 50% of the market by 2035, rising to approximately 75% of the worldwide generating market by 2050.

Predictions for the future growth and development of green energy infrastructure

The global energy market continues to be highly volatile, with factors including the global recession, energy crises, climate policy, and conflict making predictions beyond 2023 difficult. Broadly, we expect the technological and policy developments in renewables to be offset by rising costs and fluctuating demand (Nicholson, 2022).

Global investment in renewable energy is expected to continue to grow in the coming years. Driven by declining costs, increasing demand, and supportive policies. The International Energy Agency (IEA) predicts that renewable energy investments will reach $880 billion per year by 2030. Energy storage technologies such as batteries, pumped hydro, and thermal energy storage are expected to play a critical role in integrating intermittent renewable energy sources into the grid. The global energy storage market is expected to grow from 11 GW in 2020 to 167 GW in 2030, according to Bloomberg NEF (IEA, 2022).
Offshore wind energy is a rapidly growing sector with the potential to provide large-scale, low-carbon electricity to coastal communities. The IEA predicts that offshore wind energy capacity could increase 15-fold by 2040, reaching 1,000 G (IEA, 2022).
Energy efficiency measures such as building retrofits, smart grid technologies, and energy-efficient appliances can reduce energy consumption and lower greenhouse gas emissions. Governments and businesses are expected to prioritize energy efficiency measures in the coming years, leading to increased investment in these technologies.

Investments and Trends in Green Energy Infrastructure

By aligning investment strategies with sustainable investment frameworks, we can power the future with renewable energy. Investing in diverse approaches, from utility-scale projects to distributed generation, while considering environmental, social, and governance factors, creates a world where financial prosperity and a sustainable future go hand in hand.

Investments in Green Energy Infrastructure

Green energy infrastructure investments are the financial commitment towards the development of renewable energy sources. These investments aim to promote sustainable energy generation, reduce greenhouse gas and mitigate the impacts of climate change.
Solar Energy Investments: Solar energy now accounts for 4% of the Uk’s electricity. Wind Energy: Wind turbines contribute to about a quarter of the UK’s electricity needs. Water Energy: Hydropower contributes to 2.2% of the UK’s electricity generation needs.

Trends in Green Energy Infrastructure

AI and Big Data: The energy grid is very complex and requires effective decision-making function which big data and algorithms enable for utilities. These tools are used in the renewables sector to forecast power consumption and maintain energy sources.
Distributed Energy Storage System: DESS centralises renewable energy storage, overcoming irregularity in production. Flow batteries leverage low and consistent energy whereas solid-state batteries are lightweight and provide high energy density. Due to concerns regarding discharging safety and environmental pollution, start-ups are devising battery-less storage alternatives such as pumped hydro and compressed air technologies.

Investment in low-carbon energy transition: This can include renewables, energy storage, electrified vehicles, and sustainable materials. By the end of 2021, global investment in low-carbon energy transition equated to $755 billion from $264 billion in 2011. The renewable energy sector in 2021 was the most significant sector with the electrified transport sector being the fastest growing increasing 77% from 2020. The Asia Pacific region attracted the most investment, at $368 billion, and recorded the highest growth at 38%.
Climate tech: Climate tech companies have raised $165 billion from public and private markets. Two-Thirds of climate tech funding came from the public markets. This capital will be used to scale up these companies’ operations and to develop their technologies. The sectors which received the most funding were energy and transport.

Renewables provide an alternative to import reliance, allowing nations to diversify their economies and insulate themselves from the volatile price fluctuations of fossil fuels.

Countries that have driven Investments in Green Energy:

China’s energy transition investment hit $266 billion in 2021, cementing its position as the leading country. This figure was up 60% from 2020.
US came in second investing $114 billion, an increase of 17% from the prior year.
Eu states invested $154 billion combined.
UK and France rose to 4th and 5th respectively overtaking Japan
India and South Korea entered the top 10 in 2021, displacing Norway and Netherlands

Different investment strategies and Approaches in green energy infrastructure

Utility-Scale Renewable Energy Projects: This strategy involves investing in large-scale renewable energy projects like wind farms, solar power plants, or hydroelectric facilities. These projects typically have higher capacity and are designed to supply energy to the utility grid or industrial consumers.
Energy Efficiency and Demand-Side Management: This approach invests in energy efficiency measures and demand-side management programs. It includes initiatives such as retrofitting buildings with energy-efficient systems, implementing energy management systems, promoting energy-saving practices, and incentivizing energy-efficient appliances. This strategy aims to reduce energy consumption and improve overall energy utilization.
Green Infrastructure Funds and Sustainable Investing: This involves investing in green infrastructure funds or sustainable investment portfolios. These funds specifically target renewable energy projects and environmentally friendly initiatives. Investors can support a diversified portfolio of green energy projects while aligning their investments with sustainability goals.

Types of renewable energy AND Benefit of green energy infrastructure

According to the World Health Organization (WHO), over 99 percent of the world’s population breathes air that exceeds air quality regulations and endangers their health, and more than 13 million fatalities occur each year due to preventable environmental factors such as air pollution.

What is green energy infrastructure?

The term “green energy infrastructure” refers to the physical resources needed to produce, transfer, and store renewable energy, like renewable energy power plants, cables for transmission, and storage structures.

Forms of renewable energy are used in Green Energy Infrastructure

To produce clean electricity, green energy infrastructure often combines energy from renewable sources like wind, hydroelectricity, solar power, geothermal, and bioenergy.

Hydropower, a clean renewable energy source, is one example of a green energy resource. The source is replenished by snowfall and rain, which produce streams and rivers. Wind energy. Sunlight is transformed into electricity during solar power generation. Up to three kilometres beneath the surface of the planet’s crust, where molten rock contacts hot water, geothermal electricity collects the heat that is released as steam
Bioenergy is another option. A renewable source of organic decomposable material, such as wood, plants, waste, rubbish, landfill gases, and alcohol fuels, is known as bioenergy (MUNCH)

The benefit of the environment’s green energy infrastructure

Better quality of the water and air and a reduction in greenhouse gas emissions.
The green infrastructure prevents infectious agents, fertilizers, debris, and toxic metals from being discharged into our bodies of water and coastlines by collecting rain during minor storms.
Air adequacy. The nitrogen oxides as well as reactive organic molecules that combine with heat and sunlight to form ozone at the ground level are not released by sources of renewable energy(US EPA, 2015).
Vegetation. Green infrastructure increases habitat in tiny streams and washes that serve as habitats for creatures such as birds, reptiles, amphibian species, and insects by minimizing sedimentation and bank erosion.

Sustaining energy Supply with Renewables & Green Energy on infrastructure projects

Cheap renewable power might provide 65 percent of the world’s total electrical supply by 2030. It has the potential to decarbonize 90 percent of the electricity industry by 2050, significantly reducing carbon emissions and aiding in climate change mitigation.

Examples of Europe green energy infrastructure projects

The London Array: Along the coast of Kent in the UK, the offshore wind complex is right now the biggest in the entire globe. It can generate 630 MW of electrical power, sufficient to power about 500,000 houses (Olabi et al., 2023).
Solar Park Meuro: With a 166 MW capacity, this enormous-scale solar energy facility is located in Germany. It has a total of over 700,000 solar panels and occupies a space of 162 hectares (Choi & Song, 2017).
Horns Rev 3: Having a 407 MW capacity, its offshore wind power plant is in Denmark. Approximately 425,000 Danish homes can receive electricity from this North Sea-based power plant.
Alto Rabagão Dam: Its 72 MW hydropower power station is located in Portugal. The film can produce sufficient electricity to supply electricity to about 100,000 houses and is situated on the Rabago River.
AAndasol Solar Power Station: A 150-megawatt (MW) concentrated solar energy facility located in Spain. It’s made up of three distinct units and can power about 500,000 houses.

Reason for sustaining our energy infrastructure with green energy

Yes. Green energy may be used to maintain our power infrastructures. The past few years have seen a tremendous advancement in green energy technology, which is now progressively cost-competitive against conventional energy sources. As much as 90% of the world’s energy needs might be met by energy from renewable sources by the year 2050, based on a report from the International Renewable Energies Agency (IRENA)(IEA, 2022).

To completely achieve an environmentally friendly energy system, nevertheless, would necessitate large investments in renewable power innovations, favourable governmental regulations, and modifications to consumer behaviour.

Economic Impact and challenges facing green energy infrastructure Development

Investing in renewable infrastructure is both environmentally and commercially beneficial. Returns on unlisted renewables are 22% higher in global markets and 33.5% higher in emerging and developing economies when compared to the overall unlisted infrastructure market.

Impact on the economy of investing in green energy infrastructure.

Equipment for renewable energy sources produces significant economic gains and is crucial for the expansion of the national economy.

Creating jobs. Employment within the production, building, and maintenance sectors of clean energy can be created by developing and constructing environmentally friendly infrastructure developments. This can support local economic growth and decrease the rate of unemployment.
Economic expansion: Putting money into renewable energy infrastructures can help open up fresh markets and sectors, promoting expansion while broadening the economy as a whole.
Decrease dependency on energy sources: Energy infrastructure investments can assist decrease dependency on energy sources that are imported, enhancing the security of energy while minimizing sensitivity to changes in prices for energy.
Reduced energy costs: As a result of ongoing cost reductions, technologies utilizing renewable energy sources are becoming more and more competitive with those using conventional fossil fuels. Long-term energy cost reduction is possible for nations and businesses that invest in green energy infrastructure.
Lowering dependence on fossil fuels and switching to alternative power may enhance the quality of water and the environment, which can lower medical costs due to pollution-related ailments (Ding & Somani, 2010).

Challenges facing the development of green energy infrastructure.

High initial expenses: the requirement for supportive government policies, regulatory obstacles, and occasionally popular opposition
Energy Reserves: Batteries are consequently necessary to assure effective, reasonably priced, and dependable energy storage due to variations in sunlight and wind.
Financial and economic difficulties: There are financial difficulties in making sustainable technologies and energy accessible to the public. Large businesses; lack of financial support and governments; reluctance to adapt as soon as necessary or offer incentives can impede growth.
Infrastructure problems: The energy infrastructure in numerous locations is seriously underfunded, inadequately maintained, and not solid or sufficiently resilient to withstand expectations in the future.

Frequently Asked Questions

European government plays a critical role in increasing renewable energy capacity by providing regulatory frameworks and legislative solutions to the obstacles that are constraining private sector investment.

How can communities get involved in developing green energy infrastructure?

The installation of renewable energy systems, including rooftop solar panels or turbines for wind power, on private property as well as the encouragement of laws that encourage the creation of projects utilizing renewable energy are two ways that communities can promote the infrastructure needed for clean energy.

What are the examples of funding and technical support for green energy in Europe?

Three distinct projects that support the transmission of best practices and offer technical support for the creation of tangible energy projects in communities throughout Europe have received money from the European Parliament.

What kind of support does the Rural Energies Communities Consultation Hub offer Renewable Energy Communities Repository?

The Rural Energies Communities Consultation Hub and the Renewable Energy Communities Repository aim to provide technical as well as logistical guidance and support to community members and residents who want to establish residents Energy Communities or clean energy Communities in urban areas.

What role does the government play in supporting green energy infrastructure projects?

The installation of renewable energy systems, such as solar panels or wind turbines, on private property as well as the support of laws that encourage the creation of renewable energy projects are two ways that communities can support the infrastructure for green energy.

Many nations still have laws and policies that are based on monopolies or nearly monopolistic enterprises. Many nations have experienced the liberalization of markets in the energy industry. Over the last ten years, it has happened in Europe. Several independent generators of electricity entered the marketplace as a result of liberalized policies that were advantageous. To establish and expand green energy innovations, particularly for the incorporation of environmentally friendly electricity with electrical systems, it is first necessary to modify the present regulations and laws.

Can green energy infrastructure replace traditional fossil fuel-based infrastructure completely?

Yes, since it has a never-ending supply of renewable resources that can be utilized to create bioproducts that can generate electricity, and power heating and cooling systems. To make energy from renewable sources competitive with traditional fossil fuel infrastructure attempts at research and development have been made to advance technologies and lower costs. To encourage the widespread adoption of clean energy sources quickly and to transition from the use of fossil fuels to alternative sources of energy, numerous rules and regulations have been developed. (Hasanuzzaman et al.,2017) .
Whilst sources of renewable energy have benefits over conventional energy sources, their relatively high cost continues to be the principal barrier to their growing popularity globally.

What impact does green energy infrastructure have on job creation and employment?

Renewable energy’s effect on jobs is still debatable. While the advancement of clean energy sources leads to spikes in the creation of short-term installations and job opportunities in construction, the rate of job creation settles when maintenance and operation occupations take over when these employment opportunities come to an end.

The following effects of renewable energy on employment creation can be observed, according to the various project categories:

Technology development is a secure, highly specialized career that is more likely to be found abroad.
Installation and uninstallation have a higher probability to be local, transient, and highly specialized.
Operation and maintenance— Local, dependable, medium-specialized.

Reference

Chidanand, Eswara, P., & Nikhil, M. (n.d.). Renewable Energy Market Size, Share Analysis | GrowthForecast—2030. Allied Market Research. Retrieved May 5, 2023, from https://www.alliedmarketresearch.com/renewable energy-market
Halkos, G. E., & Gkampoura, E.-C. (2020). Reviewing usage, potentials, and limitations of renewable energy sources. Energies, 13(11), 2906.
IEA. (2022). Record clean energy spending is set to help global energy investment grow by 8% in 2022—News. IEA. https://www.iea.org/news/record-clean-energy-spending-is-set-to-help- global-energy-investment-grow-by-8-in-2022
Inês, C., Guilherme, P. L., Esther, M.-G., Swantje, G., Stephen, H., & Lars, H. (2020). Regulatory challenges and opportunities for collective renewable energy prosumers in the EU. Energy Policy, 138, 111212. https://doi.org/10.1016/j.enpol.2019.111212
Nicholson, M. (2022, July 11). 7 Predictions For The Future Of Renewable Energy.https://www.nesfircroft.com/resources/blog/7-predictions-for-the-future-of-renewable-energy/ Push for Renewables: Grid Integration Challenges and Technologies. (2022, May 4). FutureBridge. https://www.futurebridge.com/industry/perspectives-energy/push-for-renewables-grid- integration-challenges-and-technologies/
Qazi, A., Hussain, F., Rahim, N. ABD., Hardaker, G., Alghazzawi, D., Shaban, K., & Haruna, K. (2019).Towards Sustainable Energy: A Systematic Review of Renewable Energy Sources, Technologies, and Public Opinions. IEEE Access, 7, 63837–63851. https://doi.org/10.1109/ACCESS.2019.2906402
Renewable Energy Market Size, Share & Growth Report, 2030. (n.d.). Retrieved May 5, 2023, from https://www.grandviewresearch.com/industry-analysis/renewable-energy-market
Ritchie, H., Roser, M., & Rosado, P. (2022). Energy. Our World in Data.
What is Green Energy? (Definition, Types and Examples). (n.d.). Retrieved May 5, 2023, from https://www.twi-global.com/technical-knowledge/faqs/what-is-green-energy.aspx
https://assets.bbhub.io/professional/sites/24/Energy-Transition-Investment-Trends-Exec-Summary-2022.pdf
https://www.thetimes.co.uk/money-mentor/article/renewable-energy-how-where-invest/
https://www.irena.org/News/pressreleases/2023/Feb/Investments-in-Renewables-Reached-Record-High-But-Need-Massive-Increase-More-Equitable-Distribution
https://www.startus-insights.com/innovators-guide/top-10-renewable-energy-trends-2022/
https://environment.ec.europa.eu/topics/nature-and-biodiversity/green-infrastructure_en

CONTACT

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What does CFBL Consulting do?

CFBL consulting offers cost-assurance audits and sustainable strategy consulting services. This includes an initial ESG assessment, an X-ray view of actual costs to prevent or evidence greenwashing, impact reporting, a payroll audit to safeguard equal pay, and practical training on how to embed ESG KPIs into finance, commercial, and project investment decisions. We identify, resolve, and follow through. By establishing ourselves as strategic partners, we govern and help implement sustainable strategies. Our roadmaps ensure that project plans are successful, as a result, we measure our success by yours.

Who We Work With and What We Do

Infrastructure project: cost assurance audits, systems payroll HR audits & protocols
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Training: delivering case-based training for buy-in to technology & staff upskilling
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Sustainability & ESG Strategy Tips – How can CFBL Consulting help

Developing and implementing a sustainable business strategy for growth/scaling
Sustainability/ESG strategy: implementing, carbon measurement and benchmarking
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Sustainability & ESG: strategy implementation, carbon cost auditing/impact reporting
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Infrastructure Projects – Tips & How can CFBL Consulting help

Cost assurance: implementing capex people, process, systems & controls
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Systems auditor: examining financial records, controls, and cost systems for integrity
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SME Business Strategy -Tips & How can CFBL Consulting help

Scale-up investor funding pitch diagnostic assessment and recommendations
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Developing/implementing strategy: sustainable business strategy for growth/scaling
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Independent advisory on technology that best aligns with strategic objectives
Training: delivering case-based training, for buy-in to technology & staff upskilling