International Valuation Newsletter International Valuation Newsletter International Valuation Newsletter

Quarterly Brief

17th Edition of our International Valuation Newsletter, Q2 2022

The significance of the global energy transition from fossil fuels to renewable sources is widely acknowledged. The imperative of the transition from a fossil fuel-reliant society to a  sustainable one is generally appreciated as being not only a global warming concern but also caused by the nature of fossil fuels as, by definition, being finite resources, which will eventually become prohibitively expensive as they deplete. 

Over the past years, a systematic shift has occurred in the world’s stance on renewable energy. The need for a global energy transition, coupled with both increased governmental support and key technological advances, is hailing renewable energy as the next frontier and is fueling the embracement of and the optimistic investment in a sustainable future.

In the midst of the global energy crisis – with some of the highest energy costs in decades – this edition of the Quarterly Brief introduces renewable energy, discusses the factors contributing to the recent wave of activity in renewables as well as how to approach renewable energy valuation.

Recently, there has been an incredible wave of investment and activity spurring the energy transition, which is observed in the growing share of hydro, wind, solar and geothermal sources in global electricity production. These renewables made up 28% of the 2021 total electricity production on average throughout the year, up from an average contribution of 23% in 2016, and 16% in 2010.

This adds up to an impressive 76% increase between 2010 and 2021. The transition is driven by a variety of factors including technological improvements and declining governmental barriers that have for so long hindered the global energy transition. In the insight we explore in more detail the factors which have spurred this recent activity.