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Renewable energy offers reliable income – at a price

Renewable energy infrastructure trusts have boomed in popularity but could be vulnerable to falling power prices and other risks
Renewable energy offers reliable income – at a price
  • Renewable energy trusts have high yields and government support
  • UK projects appear expensive and look vulnerable to falling power prices
  • Trusts trade at a large premium but the sector still yields over 4 per cent

Boris Johnson's announcement this week of a 10-point plan for a self-styled green industrial revolution shows that there is no shortage of government support for the renewable energy sector. The prime minister's commitment to "build back greener" includes £160m to be invested across the UK to increase our offshore wind capacity and create thousands of new jobs. 

These measures have been devised to accelerate progress towards a wider goal of reaching net zero emissions by 2050. More specifically, the government is investing so that offshore wind will produce more than enough electricity to power every home in the country by 2030, based on current electricity usage, raising the government’s previous 30 gigawatt (GW) target to 40GW. Commitments to reduce carbon emissions are likely to be amplified next year when the UK hosts the UN’s COP26 climate conference, which will act as a global stock take of progress on reducing emissions.

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