Energy market faces sweeping change as consumers and policymakers rethink power
The past year has seen green energy indices drastically outperform general markets while their more traditional peers have dragged, due to the current easing demand and growing consumer concern for climate change
The past year has seen green energy indices drastically outperform general markets while their more traditional peers have dragged, due to the current easing demand and growing consumer concern for climate change.
And newly-elected US President Joe Biden’s ambitious plan to transform North American energy away from traditional energy sources is tipped to support this trend for the foreseeable future.
Biden has pledged to pump USD $400 billion directly into the burgeoning green energy sector over the next decade as part of a massive, USD $2 trillion dollar plan to decarbonise the nation’s energy grid by 2035.
This plan includes switching the government car fleet over to electric vehicles and placing a pause on gas and oil leases.
The Biden administration has also signalled plans to use foreign policy to push for more clean energy on a global scale – with some industry leaders noting this could prompt competition between the US and China to develop new and innovative energy solutions.
Join our live investor briefing on Friday at 12pm (AEDT), where we will be outlining a new investment opportunity that’s structured to benefit from potential dispersion between Green Energy and Traditional Energy (Oil and Gas) US listed companies. Click here to attend.
For its part, China is already undertaking an aggressive decarbonisation plan with a view to going carbon-neutral by 2060. Last year, the Asian superpower spent USD $11 billion on green energy projects within its broader Belt and Road investment program.
Consumers going green, but threat of bubble looms
These changes in government policy come at a time when a majority of American consumers say they are concerned about energy and the climate – with 68% of consumers reportedly worried by the prospect of climate change.
More than half (53%) say it is “extremely important” that part of their electricity supply comes from green sources.
Further, six in ten American business owners say they feel increasingly pressured to be disclose – and respond to – the climate risks they face.
Despite this, some analysts are cautioning green energy stocks are at risk of falling into a bubble, noting the sector bears some similarities to the dot-com bubble of the ‘90s (including rapidly increasing valuations and a vocal retail investor base).
And although demand for oil dipped in 2020, investment bank Goldman Sachs predicts the price of Brent will increase through 2021 to return to pre-pandemic levels by 2022 after the oil price enjoyed its best quarterly performance in 30 years in the three months ending June 2020.
The bank now expects demand for oil will not reach a peak until 2030 at the earliest.
We have access to a new investment opportunity that’s structured to benefit from potential dispersion between Green Energy and Traditional Energy (Oil and Gas) US listed companies. The investment opportunity is only going to be open for a short period of time. Click here to request a PDS or to book into our investor briefing below.
Date: Friday 19th February
Time: 12am AEDT
Format: 20 minute presentation followed by a Q&A
To register for this session click here.
This is General Advice only, it doesn’t consider your personal circumstances, you need to decide for yourself if this is appropriate to you and your situation. Past performance is not an indicator of future performance and you should read the PDS in full before making any decision on the investment.
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- ABC News, US President Joe Biden pauses oil and gas leases, cuts subsidies in ‘bold’ climate steps
- China Dialogue, Researchers unveil roadmap for a carbon neutral China by 2060
- CNBC, Biden plans to replace government fleet with electric vehicles
- CNBC, Oil demand to return to pre-pandemic levels by 2022, Goldman says, but unlikely to peak this decade
- Deloitte, 2021 oil and gas industry outlook
- Deloitte, Energy management: Paused by pandemic, but poised to prevail
- Energy World, Tesla and other green energy investments look bubble-like
- Financial Post, Joe Biden’s $2-trillion green energy ‘revolution’ is about to slam into political reality
- Foreign Policy, How Biden’s Climate Plans Will Shake Up Global Energy Markets
- Joe Biden, 9 Key Elements of Joe Biden’s Plan for a Clean Energy Revolution
- NBC News, As Wall Street dollars flow into green energy, what’s next for the oil industry?
- The Conversation, Biden’s ambitious energy plan faces headwinds, but can move the US forward
- The New York Times, How Sustainable Is the Rally in Renewable Energy Stocks?
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