Investing in renewable energy: ‘pro et contra’ 1
INVESTING IN RENEWABLEENERGY: ‘PRO ET CONTRA’2Investing in renewable energy: ‘pro et contra’
Investing in renewable energy: ‘pro et contra’ 3
• Providing an overview of the industry and the possiblereturns from investment• Providing advice on the prospects of inve...
Table of Contents1. Renewable Energy Industry:a. Global Industry overviewb. UK Renewable Energy Industry2. Investment anal...
Renewable Energy Industry6Investing in renewable energy: ‘pro et contra’
7Investing in renewable energy: ‘pro et contra’Source: Ourfiniteworld (2007)Oil discoveries from 1900
Investing in renewable energy: ‘pro et contra’ 8
Global Investment activity in renewablesQ1 2004 – Q1 20139Investing in renewable energy: ‘pro et contra’Source: Bloomberg,...
UK Renewable Energy Industry10Investing in renewable energy: ‘pro et contra’
Investing in renewable energy: ‘pro et contra’ 11Source: DECG, 2012Renewables’share of electricitygenerated(2010 – 2012)Bi...
0510152025302012 2020Investing in renewable energy: ‘pro et contra’ 12Size of industry (2012 – 2020)Energy produced by the...
Key stakeholders13Investing in renewable energy: ‘pro et contra’
Major companies that supply renewableenergy14Investing in renewable energy: ‘pro et contra’
Political Economic• UK Government participation in2020 EU Renewable EnergyTarget to supply 15% of allenergy from renewable...
Good Energy16Investing in renewable energy: ‘pro et contra’
Good Energy: SWOT analysis17Investing in renewable energy: ‘pro et contra’Strengths WeaknessesSupplies 100% renewable ener...
Financial PerformanceInvesting in renewable energy: ‘pro et contra’ 18Source: Good Energy, 2006 - 2013£million
Investing in renewable energy: ‘pro et contra’ 19Financial RatiosSource: Good Energy, 2006 - 201300.511.522.532006 2007 20...
Recommendations to the client20Investing in renewable energy: ‘pro et contra’
Market performance of Good Energy andSSE stocks, at 22/04/1321Investing in renewable energy: ‘pro et contra’Source: LSE, 2...
Key investment statistic for Good Energy.and Scottish and Southern Energy22Investing in renewable energy: ‘pro et contra’
• Invest 100% in Good Energy• Invest 100% in Scottish and Southern Energy (SSE)• Diversify portfolio between Scottish and ...
Q&A Section24Investing in renewable energy: ‘pro et contra’Tetyana Borsey 09543772Nikita Larionov 12108281Kenneth White 12...
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Investing in renewable energy: ‘pro et contra’

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This presentation was prepared and demonstrated 26th April 2013 by Tetyana Borsey, Nikita Larionov, Kenneth White, and Xinyi Zheng
Its main objective was providing an overview of the UK renewable energy industry and advice on the prospects of investing in excess £10 million in this industry.

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Investing in renewable energy: ‘pro et contra’

  1. 1. Investing in renewable energy: ‘pro et contra’ 1
  2. 2. INVESTING IN RENEWABLEENERGY: ‘PRO ET CONTRA’2Investing in renewable energy: ‘pro et contra’
  3. 3. Investing in renewable energy: ‘pro et contra’ 3
  4. 4. • Providing an overview of the industry and the possiblereturns from investment• Providing advice on the prospects of investing in excess£10 million in the UK renewable energy sector.Investing in renewable energy: ‘pro et contra’ 4Objectives
  5. 5. Table of Contents1. Renewable Energy Industry:a. Global Industry overviewb. UK Renewable Energy Industry2. Investment analysis on Good Energy:a. SWOT of Good Energyb. Financial Performance3. Recommendations to the client4. Q&A SectionInvesting in renewable energy: ‘pro et contra’ 5
  6. 6. Renewable Energy Industry6Investing in renewable energy: ‘pro et contra’
  7. 7. 7Investing in renewable energy: ‘pro et contra’Source: Ourfiniteworld (2007)Oil discoveries from 1900
  8. 8. Investing in renewable energy: ‘pro et contra’ 8
  9. 9. Global Investment activity in renewablesQ1 2004 – Q1 20139Investing in renewable energy: ‘pro et contra’Source: Bloomberg, 2013$billion
  10. 10. UK Renewable Energy Industry10Investing in renewable energy: ‘pro et contra’
  11. 11. Investing in renewable energy: ‘pro et contra’ 11Source: DECG, 2012Renewables’share of electricitygenerated(2010 – 2012)Bioenergy, 36.71%OnshoreWind, 28.74%OffshoreWind, 18.12%Hydro, 12.56%Otherincludingsolar, 3.86%Share of each source within the industry(2012)
  12. 12. 0510152025302012 2020Investing in renewable energy: ‘pro et contra’ 12Size of industry (2012 – 2020)Energy produced by the industry(2006 - 2020)01020304050607080£billionTerawattshoursproduced
  13. 13. Key stakeholders13Investing in renewable energy: ‘pro et contra’
  14. 14. Major companies that supply renewableenergy14Investing in renewable energy: ‘pro et contra’
  15. 15. Political Economic• UK Government participation in2020 EU Renewable EnergyTarget to supply 15% of allenergy from renewables;• the index of confidence to reachthis target is only 47%(EFA, 2013)• In 2012 global investment in therenewable energy market shrunkby 11% to $268.7bn(Bloomberg, 2013)Socio-cultural Technology• Social acceptance of climatechange could influence peopleto use renewable energy in thehome• Reduction of productioncosts;• Electric supply infrastructure wasoriginally constructed aroundhaving large fossil fuel powerplantsInvesting in renewable energy: ‘pro et contra’ 15PEST: Renewables
  16. 16. Good Energy16Investing in renewable energy: ‘pro et contra’
  17. 17. Good Energy: SWOT analysis17Investing in renewable energy: ‘pro et contra’Strengths WeaknessesSupplies 100% renewable energy so has high CRIHigh overall potential of RoEThe production of renewable energy contributes tosecure energy supply to substitute fossil fuelsScale and scope of the supply chainEstablished customer basePrice elasticity of demand for renewable energySmall market shareEnergy production is capital intensiveCoordination cost associated with sourcesrenewable suppliesIncreasing costs for electric gridsIncreasing rates of work-related employee illnessesOpportunities ThreatsIncreasing demand for electricity in the UKEU funds for renewable energyUK’s target level of renewable energy production(referendum)R&D gives the potential for a larger returnUntapped offshore opportunities for wind farmsPotential expansion of the biomass supply chainIncreased competition from MNEsInconsistency of sources (Solar panel/sun shine)The renewable energy market is a relatively newmarketChanging of government policy in terms of subsidiesand tariffsConsumers contracting budget
  18. 18. Financial PerformanceInvesting in renewable energy: ‘pro et contra’ 18Source: Good Energy, 2006 - 2013£million
  19. 19. Investing in renewable energy: ‘pro et contra’ 19Financial RatiosSource: Good Energy, 2006 - 201300.511.522.532006 2007 2008 2009 2010 2011 2012Gross profit marginOperating profit marginROECurrent ratioAcid testpoints
  20. 20. Recommendations to the client20Investing in renewable energy: ‘pro et contra’
  21. 21. Market performance of Good Energy andSSE stocks, at 22/04/1321Investing in renewable energy: ‘pro et contra’Source: LSE, 2013
  22. 22. Key investment statistic for Good Energy.and Scottish and Southern Energy22Investing in renewable energy: ‘pro et contra’
  23. 23. • Invest 100% in Good Energy• Invest 100% in Scottish and Southern Energy (SSE)• Diversify portfolio between Scottish and SouthernEnergy and Good EnergyInvesting in renewable energy: ‘pro et contra’ 23Investment Possibilities
  24. 24. Q&A Section24Investing in renewable energy: ‘pro et contra’Tetyana Borsey 09543772Nikita Larionov 12108281Kenneth White 12109469Xinyi Zheng 12110244

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