Green Infrastructure: Green Energy

Green infrastructure is the range of systems and technologies that enable and provide for a more sustainable way of living. In this blog series, we will outline seven specific areas: green transportation, green energy, green fuel, waste management, green infrastructure & equipment, pollution control, and green constructions. We will define these themes, how they contribute to green infrastructure and how they are instrumental to the space as a whole moving forward.

Green Energy

Energy generated from natural resources, such as sun, wind and water, is considered a green source of energy. These energy sources are considered renewable as they are consistently replenished and they lack the carbon emission output of their fossil fuel counterparts.

Companies contributing to the green energy ecosystem may be involved with the distribution of energy generated by renewable sources (i.e. electric power plants) or the manufacturing and/or servicing systems, including wind turbines, solar panels and hydroelectric dams. These types of companies are integral to the shift towards a more sustainable way to power everyday life.

Demand for renewable energy has continued to grow given climate impact concerns and the finite supply of traditional fossil fuels. Green energy businesses should benefit from greater adoption, particularly as prices for the energy generated from green sources decline. BP estimates that renewables consumption will grow 13.21% on average over the next 25 years versus oil with an estimated average consumption of -5.41% and coal with -4.75% over that same time.

Global Energy Consumption 1990-2050, by Energy Source

Source: BP as of March 2022.

The global and domestic energy transition that is taking place creates opportunities for investors across many aspects of the sector. An example of a green energy company is a wind energy company that specializes in the development, construction, and operation of wind turbines to generate electricity. The company may conduct site assessments, design or engineer turbines or associated infrastructure, secure financing and permits, or manage ongoing maintenance and operation of the turbines. This could also be explained for solar, water, geothermal companies and the like.

Investors can access these and other key green infrastructure companies with VanEck Green Infrastructure ETF (RNEW). The ETF provides diversified exposure to companies across the seven green infrastructure sub-themes.

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