Will 2021 be the year of green energy?

The coming months may turn out to be groundbreaking for the entire renewable energy market. Renewable energy sources have already recorded record interest, both from customers and investors themselves. The trend seems to continue despite uncertain times for other industries. Especially in 2021, companies related to green energy will not have to worry about the future of the sector.

With momentum and without stock exchange competition

The last decade saw dynamic growth in the consumption of renewable energy products at an annual rate of (on average) 13,7%. According to analysts from International Energy Agency (IEA), renewable sources is also the only niche that recorded double-digit results for the entire industry and an unrivaled contender in the category of successive increases as a contender for top places on the energy podium. The biggest players? China (responsible for 70 percent of the world's production of photovoltaic panels), the European Union (with one of the largest RES markets) and the United States (declaring a return to the Paris Agreement).

Vigilant investors also reacted to the huge potential of RES. Still in the autumn of 2020, i.e. during the so-called second wave of the epidemic, index Invesco Solar ETF TAN noted down 144.1-percent. increases. The volume of the call option itself ETF iShares Global Clean Energy in October last year, he recorded a jump at the level of ... 600%!! Considering the situation over the course of all 12 months, S&P Global Clean Energy increased by over 177 percent. And the energy competition? Indices based on on coal and traditional forms of mining, recorded regular declines: Dow Jones US Coal by over 75 percent, a S&P 500 Energy by about 33 percent

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RES in the lobby

Optimistic for green energy are also the forces in the government's lobby. The global RES market can expect a lot of support from the new US president, Joe Biden, who declared that the US would return to the provisions of the Paris Agreement. Donald Trump resigned from the implementation of the climate provisions on November 4, 2020, although this fact did not discourage investors from green energy. The market felt the importance of the president-elect's words even before his official assumption of power. The Democrat candidate plans to donate as much as $ 2 billion to the development of the eco-economy. However, without the US investing in renewable energy, would the global market turn away from green energy? Certainly not. The European Union is also committed to a firm climate policy.

One of the most strategic months of 2021 will be June. In early summer, the European Commission plans to present reports on the revision of the existing climate regulations, as well as to propose changes in the climate and energy legislation. It is quite possible that then further guidelines on the scale of the carbon dioxide reduction targets will be issued. The December project of the European Council to increase the reduction target from 40 percent. at 55 percent reduction of emissivity, it is optimistic. Companies dealing with green energy will have even more room for market maneuver, which is reflected, among others, in Respect Energy investment in Pomerania, which in the perspective of the next 30 years will contribute to the reduction of CO2 emissions by approx. 5 million tonnes. Experts also predict that a quite possible scenario is the introduction of charges depending on CO2 emissions from buildings and transport. According to the representatives of the Lewiatan Confederation, special revisions of the Commission directives on renewable energy may seem promising for the regional energy sector.

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Green energy as an opportunity for Polish investors

Sebastian Jablonski

Both the changes from across the Atlantic and the decisions of the authorities in Brussels will affect the situation of renewable energy sources in Poland. The funds from the financial framework for 2021-2027 seem to be the most strategic, as well NextGenerationEU, i.e. The Facility for Reconstruction and Resilience (RRF) and the Just Transition Fund. In the second quarter of 2, the Polish government must present the assumptions of the so-called just transformation. Plan incl. development of the domestic renewable energy sector will be largely financed from EU funds. Over 2021 percent funds from the EU are dedicated to investments in climate protection and low-emission energy. It is quite possible that the first funds will go to the Vistula River this year.

RRF alone is a cash injection for Poland of EUR 23 billion in the form of non-repayable grants and EUR 34 billion in the form of loans. But what about the private sector? And there are many surprises in this segment. One of the most promising initiatives is the strategic partnership of Respect Energy (formerly TRMEW Obrót SA) and the German solar concern GOLDBECK SOLAR GmbH. First duo project? The photovoltaic farm in Zwartów in Pomerania, which is to be the largest power plant of this type in the entire Central and Eastern Europe, with a final value of approx. EUR 200 million. In the face of such dynamic changes on the global RES market, the region should definitely take advantage of the opportunities that arise. Green energy will benefit not only the climate, economy and the consumer. The entire procurement of subsidies, new initiatives and trends is also a great opportunity for domestic investors.

Summation

The year 2021 is primarily a time for the renewable energy industry to use instruments already available on the market as soon as possible. The growth dynamics of the entire sector is one of the main arguments for potential investors who would like to bet on a niche that fits not only in the government's climate strategies, but also in a strong trend among consumers themselves. The coming months should be synonymous with major changes and extremely hard work for the sector. Observing the situation on the domestic market, the first steps towards completely new industry standards are already visible.

Author: Sebastian Jabłoński, president of the board of Respect Energy