investment viewpoints

wind: harnessing the power of renewable energy.

wind: harnessing the power of renewable energy.

Energy production and use accounts for more than two thirds of greenhouse gas emissions, according to the International Energy Agency. This makes it a priority sector when it comes to the sustainability of our global system.

Renewable energy is at the core of many countries’ strategies to meet climate goals. Recent estimates would suggest clean energy could achieve 90% of the energy-related CO2 emission reductions required to meet the central goals of the 2015 Paris Climate Change Agreement.

More than 67% of greenhouse gas emissions are from energy production and use, and the most prominent sector supported by the LO Funds – Global Climate Bond fund is energy. Around 96% of the portfolio-weighted energy sector disbursements were allocated to renewable energy generation, with a small component to products, such as LED light bulbs and smart meters. The top technologies were wind with over 45% of generation and solar with over 20%.

Wind is one of the fastest-growing renewable energy technologies, according to the International Renewable Energy Agency (IRENA), not least because it is becoming an increasingly competitive industry helped by years of steady cost-decline. Clean energy is now expected to fall within the cost range of fossil fuels by 2020, according to the International Renewable Energy Agency.  

This improved competitiveness is happening on a global scale. While Europe has been a leader in developing renewable technology, China has emerged as a key driver of wind-energy market growth over the past decade and installed more than twice that of any other region in terms of wind power capacity in 2017, according to the Global Wind Energy Council (GWEC).

Adoption appears to be accelerating. Wind supplied a relatively small proportion of the EU’s power in 2017 - 11.6% - but new annual market records were set in Germany, the UK, France, Belgium, Ireland and Croatia, according to the GWEC.

We continue to prioritise clean energy production and believe that wind power is an important element in the transition to a low-carbon economy as it is both a versatile and adaptable form of clean energy.

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