Skip to main content
UK - Financial Adviser
Select Region Select User Type
  • Global
    • Home
  • UK Investors
    • Financial Adviser
    • Private Investor
  • International Investors
    • Private Investor
    • Professional Investor
  • Fund Centre
    • Our Funds
      • Equities
        • Rathbone Global Opportunities Fund
        • Rathbone Greenbank Global Sustainability Fund
        • Rathbone Income Fund Fund
        • Rathbone UK Opportunities Fund
      • Fixed Income
        • Rathbone Ethical bond Fund
        • Rathbone High Quality Bond Fund
        • Rathbone Strategic Bond Fund
        • Rathbone Greenbank Global Sustainable Bond Fund
      • Multi-Asset
        • Rathbone Greenbank Multi-Asset Portfolios
        • Rathbone MULTI-ASSET PORTFOLIOS
      • Sustainable
        • Rathbone Greenbank Global Sustainable Bond Fund
        • Rathbone Greenbank Global Sustainability Fund
        • Rathbone Greenbank Multi-Asset Portfolios
    • Literature Library
    • Consumer Duty
    • Prices and Performance
    • Glossary of Terms and FAQs
  • Strategies
    • Equities
    • Fixed Income
    • Multi-Asset
    • Sustainable
  • Our Clients
    • Private Investor
    • Financial Adviser
    • International Private Investor
    • International Financial Adviser
  • Rathbones
  • Global Home
  • Insights
    • Fund Insights
    • In the know blog
    • Review of the week
    • The Sharpe End podcast
  • About us
    • About us
    • Our People
    • Awards
    • Media centre
    • Responsible Investing at Rathbones
  • Contact
Home Home

Search

  • Fund Centre
    • Our Funds
      • Equities
        • Rathbone Global Opportunities Fund
        • Rathbone Greenbank Global Sustainability Fund
        • Rathbone Income Fund Fund
        • Rathbone UK Opportunities Fund
      • Fixed Income
        • Rathbone Ethical bond Fund
        • Rathbone High Quality Bond Fund
        • Rathbone Strategic Bond Fund
        • Rathbone Greenbank Global Sustainable Bond Fund
      • Multi-Asset
        • Rathbone Greenbank Multi-Asset Portfolios
        • Rathbone MULTI-ASSET PORTFOLIOS
      • Sustainable
        • Rathbone Greenbank Global Sustainable Bond Fund
        • Rathbone Greenbank Global Sustainability Fund
        • Rathbone Greenbank Multi-Asset Portfolios
    • Literature Library
    • Consumer Duty
    • Prices and Performance
    • Glossary of Terms and FAQs
  • Strategies
    • Equities
    • Fixed Income
    • Multi-Asset
    • Sustainable
  • Our Clients
    • Private Investor
    • Financial Adviser
    • International Private Investor
    • International Financial Adviser
  • Rathbones
  • Global Home
  • Insights
    • Fund Insights
    • In the know blog
    • Review of the week
    • The Sharpe End podcast
  • About us
    • About us
    • Our People
    • Awards
    • Media centre
    • Responsible Investing at Rathbones
  • Contact
Home

Search

Where the wind blows

Rathbone Global Sustainability Fund manager David Harrison discusses the rise of renewable energy and how it is making a more sustainable world.

21 July 2020

Breadcrumb

  1. Home
  2. Knowledge and Insight
  3. Where the wind blows

Article last updated 19 February 2023.

Renewable energy has seemingly been around forever, but only recently has the world started to take it seriously. California has had wind turbines for decades, but it barely made a dent in the overall US energy mix.

"In the US, for example, wind turbines and hydroelectric dams each account for less than 10 per cent of overall energy production."

The fact is, renewables like wind and solar power have mainly been bit players on the world stage. In the US, for example, wind turbines and hydroelectric dams each account for less than 10 per cent of overall energy production.

There are several good reasons for this. First, fossil fuels such as oil and gas are historically cheaper. Second, many renewables could only generate power under certain environmental conditions.

But the times are changing – partly because of concerns about climate change and partly because of economics. This is beneficial for investors interested in a sustainability or environmental, social and governance theme, because renewables offer exposure to energy and utilities but in a responsible package.

Levelling the playing field

In the US, solar and wind power are on a solid growth trajectory – but at a gradual rather than rapid pace. Case in point: renewables are forecast to account for around 25% of the US energy generation mix by 2050, up from just under 10% today.

This growth rate may have been faster were it not for the US shale gas revolution that has taken place over much of the past five years. As gas prices dropped, a new generation of gas power plants came online, likely displacing renewable alternatives.

Wind is catching up, though. The US Department of Energy in 2019 found that, in many regions of the US, wind farms are cheaper to build and operate than gas-fired power plants.

It’s a far cry from 2009, when power purchase agreements for wind-generated electricity peaked at about US$70 per megawatt-hour. Prices have fallen a long way since then, with the national average in the US having fallen to around US$20 per megawatt-hour by 2018.

Accessing renewables

For obvious reasons, sustainable investors have tended to steer clear of oil and gas, which means little to no exposure to energy as an asset class. But now that prices are falling and the market is beginning to mature, opportunities are beginning to emerge.

The objective of the Rathbone Global Sustainability Fund is to create long-term value for investors, society and the environment through companies that display strong environmental, social and governance (ESG) principles and follow a sustainability theme. When we look for companies, we not only want them to satisfy a sustainability theme, but they also need to be high-quality, cash generative businesses with strong franchises, have no financial stress and are long-term thinkers.

"The objective of the Rathbone Global Sustainability Fund is to create long-term value for investors, society and the environment through companies that display strong environmental, social and governance (ESG) principles and follow a sustainability theme."

Admittedly, there are only a limited number of companies in this sector that represent good investment opportunities. Wind turbine manufacturers are often subsidiaries of larger industrial conglomerates, while others may not be attractive from a profitability and cash-generation standpoint.

This doesn’t make it impossible. In the US, there is Hannon Armstrong, which provides loans to customers to help them finance projects such as retrofitting buildings to make them more energy efficient and installing solar panels in the residential housing market. The company also invests in wind power and leases land to be used for large solar farms.

Elsewhere, companies like Vestas and EDP Renováveis are examples of high-quality operators in the renewables sector that complement each other, rather than compete. Vestas is the largest wind turbine manufacturer in the world, with an order backlog in the region of €32.8 billion. EDP Renováveis, on the other hand, finances, builds and operates renewable energy projects including solar and onshore and offshore wind farms from start to finish.

A societal shift

When we look at what’s happening around the world, it’s clear that we are beginning to see a societal shift towards greater awareness of how our actions impact on the environment and our communities. Renewables are now seen as viable alternatives to fossil fuel energy, helped along by better economies of scale and cheaper production costs. The companies that are most successful at establishing a strong market position and building a positive and sustainable business model stand a good change at delivering over the long term.

Popular Articles

9341_multi-asset_webinar_cm.jpg
26 February 2025

Multi-Asset Webcast | February 2025

We are delighted to invite you to our upcoming webcast with Will McIntosh-Whyte, fund manager of the Rathbone Multi-Asset Portfolios.

Find out more

1 min

ethical bond fund field
30 April 2025

Ethical Bond Webcast | April 2025

After a period of volatility in risk markets, Bryn will give his views on the outlook for rates and credit markets and will go into how the Washington whack-a-mole politics are creating very short-term volatility.

Find out more

1 min

9341_multi-asset_webinar_cm.jpg
14 May 2025

Multi-Asset Webcast | May 2025

Join David Coombs, Head of Multi-Asset Investments of the Rathbone Multi-Asset Portfolios, for his next webcast on Wednesday 14 May at 10.00 am.

Find out more

1 min

MOST READ
  1. Multi-Asset Webcast | February 2025

  2. Ethical Bond Webcast | April 2025

  3. Multi-Asset Webcast | May 2025

  4. Income Fund | June 2025

  5. Review of the week: The emperor's new tariffs

Let's Talk

Ready to start a conversation? Please complete our enquiry form, we look forward to speaking with you

Enquire
  • Important Information
    • Brexit Statement
    • Important information
    • UK Modern Slavery Act
    • Accessibility
    • Privacy
    • Cookies
    • Cookie preferences
    • Complaints
  • Important Information
    • Consumer Duty
    • Voting disclosure
    • Assessment of value reports
    • TCFD Reports
    • SDR Consumer-Facing Disclosures
    • Financial Ombudsman Service
    • Financial Services Compensation Scheme
    • Glossary of terms and FAQs
    • MIFIDPRU8
Address

Rathbones Asset Management
30 Gresham Street
London
EC2V 7QN

Rathbones Asset Management Limited is authorised and regulated by the Financial Conduct Authority and a member of the Investment Association. A member of the Rathbone Group. Registered Office 30 Gresham Street, London EC2V 7QN. Registered in England No 02376568.

© 2025 Rathbones Group Plc
Incorporated and registered in England and Wales. Registered number 01000403

Follow us
LinkedIn
City Hive Logo
ACT Logo

Rathbones Asset Management is delighted to be an early signatory of the ACT Framework created by City Hive

Diversity Project Logo

Rathbones Asset Management is a member of The Diversity Project

The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.