According to fund manager Schroders, renewable energy is set to exert downward pressure on energy prices, accelerating a move away from fossil fuels.
Schroders lead portfolio manager, Simon Webber, said that in the coming decade, a wave of cheap renewable energy will help reduce energy prices, making electric vehicles more affordable and changing the narrative that fighting climate change will hit those on low incomes. While renewables have benefited from subsidies in the past, Webber said that a combination of technological development and manufacturing scale has brought unsubsidised wind and solar power costs to below the average wholesale power price across Europe.
Webber commented: “As with so much related to climate change, the importance of this shift is being underestimated by financial markets: investors appear reluctant to forecast a future in which renewables and energy storage come to dominate power markets.” He added that the argument that tackling climate change is socially regressive is outdated. “Renewable energy is now making electrical power and electric mobility more affordable, a fact that is likely to be increasingly recognised by politicians across the political spectrum.”