Any investor will tell you that the key to success is looking to the future. Investing in a company or sector is all about assessing its value now, and trying to predict its value going forward.
The energy sector, which is going through a radical period of transformation, is an area where savvy investors can make huge profits in a short period of time. However, doing this is absolutely reliant upon being very aware of the current state of the industry, and being able to accurately analyse the trends of tomorrow.
So, with that in mind, what should you be aware of when contemplating investing in the energy sector?
The growth of renewables
The move away from fossil fuels and towards renewables is a trend that is taking place the world over. This is, quite simply, inevitable; with fossil fuels such as oil and gas eventually going to run out, it is essential that alternatives are sought. And when it comes to the UK, it would appear that we are on the verge of a huge renewables boom.
According to research by GlobalData, the UK’s renewables capacity is expected to ‘at least double’ by 2030. With all of the country’s coal power stations – as well as all but one of its nuclear power stations – set to be closed by this period, such upcoming reliance on renewables makes sense.
And, with National Grid having announced recently that it is going to invest a whopping £58.9 million in renewables infrastructure over the next 12 months, it would seem that there is no slowing the renewables boom.
The end of nuclear?
Nuclear was once regarded as the future of energy, but it would appear that it is now falling out of favour, with renewables set to overtake it in terms of global output.
Currently, 10% of the planet’s energy supply is created via nuclear power, with 9% via renewables. However, a report recently released by BP suggests that renewables will overtake nuclear ‘in the very near future’. And, according to the experts who drafted the report, that overtake could even occur by the end of 2019.