SENNA

BlackRock Sees Growing Opportunities in Renewable Energy
By Senna Williamson

New York - BlackRock, the world's largest asset manager, sees growing opportunities in renewable energy as the global appetite for affordable and sustainable power sources continues to increase.

"The growing appetite for affordable energy is creating opportunities for renewables to increase their share of the global power mix," said Samantha Kaminker, head of sustainable investment research at BlackRock. In a wide-ranging interview with ESG Clarity, Kaminker outlined several key trends driving investment in renewable energy projects.

One major factor is the declining cost of renewable technologies like solar and wind power. "The cost of renewable energy has dropped significantly in recent years, making it increasingly competitive with traditional fossil fuel sources," Kaminker explained. She noted that the global weighted average cost of electricity from newly commissioned utility-scale solar photovoltaic projects fell by 85% between 2010 and 2020.

At the same time, government policies around the world are providing incentives and mandates to accelerate the transition to clean energy. "We're seeing a growing number of countries and regions setting ambitious targets for renewable energy adoption, which is spurring investment in this space," said Kaminker.

This confluence of falling costs and supportive policies is opening up new opportunities for investors, according to Kaminker. "Renewable energy projects can now offer attractive risk-adjusted returns, making them a compelling investment proposition for institutional investors like pension funds and insurers who are seeking stable, long-term cash flows."

Kaminker highlighted the solar and onshore wind sectors as two areas that BlackRock is particularly focused on. "Solar and onshore wind have reached grid parity in many markets, meaning they can generate electricity at a lower cost than conventional fossil fuel sources. This is driving strong investor interest and deal flow in these segments."

While the renewable energy transition presents vast opportunities, Kaminker cautioned that challenges remain. "The intermittent nature of solar and wind power means grid integration and energy storage solutions are critical to ensuring reliable and affordable power supply. Navigating the regulatory landscape and securing the necessary permits can also be complex."

Nevertheless, Kaminker expressed optimism about the long-term prospects for renewable energy investment. "The fundamental drivers supporting the growth of renewables - climate change mitigation, falling technology costs, and supportive policies - remain firmly in place. We expect to see continued strong investor appetite for well-structured, high-quality renewable energy projects in the years ahead."