Finance

5-02-25

One way of encouraging development of sustainable technologies is by personally making investments in them. Since technologies such as wind power, solar power, bicycles, electric cars are the future, these funds have as good a chance of yielding reasonable returns as traditional technologies.

People who keep with the traditional industries like oil and large cars are likely to find their investments declining in value as the burning of petroleum-based fuels become heavily taxed or rationed. Carbon fuel deposits may in time become un-burnable.

From a personal experience, my Jupiter Ecology fund grew 12% per annum over the last six years (2017-2024) while our Henderson’s Global care fund grew by 8%. These performed as well as, or better than our conventional investments.

Our investment in ACE hydro-electric scheme on the Bridge of Don, Aberdeen, in comparison yields 4%, but these bonds are being paid back in three, yearly installments, to reduce the interest payments they have to make. The share holders were paid no interest between 2016 and 2022 due to insufficient revenue being generated, but were expecting 3.6% in 2023 and thereon. By 2023, income from electricity sales had increased from 7.9 p/kWh, to 21.0p/kWh due to the increase in energy prices caused by the Ukraine war, while the FIT had been increased by the government from 20p /kWh to 24.75 p/kWh, to match the cost-of-living index. Considerable work by ACE volunteers was requires to keep the screen clear, remove stones from the intake and maintain the structure.

For comparison the strike price for offshore wind in 2025 is 7.3 p/kWh. The income for the ACE plant per kWh, including the FIT subsidy,  is 6.2 times that of offshore energy, yet it is only now able to pay shareholders interest. Unlike wind power, the water power is relatively constant, which makes its energy more valuable, but the low return from these small scale turbines and the cessation of the FIT subsidy means such schemes are now uneconomic.  

Stockbrokers can help investments become green.  A keen environmentalist stockbroker I knew, who invested on behalf of a major investment bank, used to ask potential recipient companies for their environmental statements during negotiations. These were produced with alacrity.