Foundations for Investing in Renewable Energy

Joost Notenboom

Discover how investing in renewable energy aligns with the principles of a just transition. In this video, Joost explains how businesses and investors can balance climate goals with social and environmental responsibility through the lens of NewCo, a hypothetical SME producing renewable energy.

Investment Management Sector

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Foundations for Investing in Renewable Energy

6 mins 54 secs

Key learning objectives:

Understand the renewable energy market and investment landscape
Outline how to align renewable energy investments with just transition principles
Understand importance of stakeholder value creation in responsible green business practices

Overview:

The energy transition presents significant opportunities for economic growth and climate action, but success requires strategic development and investment. Companies developing and operating renewable energy assets can lead the way by leveraging renewable energy technologies such as solar, wind, and battery storage. But it is important to align business goals with stakeholder needs, while ensuring a just and inclusive transition that benefits communities and workers alike. By understanding the key drivers of renewable energy innovation, companies can unlock new investment opportunities, navigate challenges, and create long-term value in the evolving green economy.

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Summary

What makes renewable energy investing a critical opportunity today?

The energy transition shifting from fossil fuels to renewable energy stands as one of the 21st century’s most pressing challenges and opportunities. Beyond mitigating climate change, renewable energy investment provides a unique chance to reshape economies and align with sustainability goals. Technologies like solar, wind, and battery storage are at the forefront of this shift, driven by ambitious carbon reduction targets and increased electrification. This growth is fuelled by factors like energy independence, accelerated by geopolitical tensions such as the war in Ukraine.

What is our NewCo, and how do such companies reflect the investment landscape?

NewCo is a hypothetical small-to-medium enterprise (SME) and it represents independent power producers (IPPs) that generate recurring revenue by selling electricity while creating strategic value. IPPs like NewCo are key players in a fragmented market dominated by utilities, developers, and independent producers. Understanding how these businesses operate offers valuable insights for investors and entrepreneurs aiming to enter the renewable energy sector.

What does it mean to invest responsibly in renewables?

Renewable energy projects must balance financial returns with social and environmental responsibility. This involves mitigating the impacts of infrastructure on local communities and biodiversity while addressing the needs of workers transitioning from high-carbon industries. These principles align with the “just transition” framework, which ensures that the economic benefits of renewable energy are equitably shared. At a European level, initiatives like the Green Deal and its Just Transition Mechanism provide guidelines for achieving these outcomes.

How can stakeholders benefit from renewable energy projects?

Stakeholder value creation is at the core of responsible renewable energy investments. For instance, communities affected by new projects must see tangible benefits, such as employment opportunities and infrastructure improvements. Similarly, biodiversity considerations should guide project design and implementation to minimise ecological harm. These practices not only ensure compliance with regulatory standards but also build trust and long-term support from stakeholders.

What role does innovation play in the energy transition?

New business models and technological advancements are critical for scaling renewable energy solutions. Companies like NewCo must leverage these innovations to optimise asset lifecycle management from development to operation and create additional value for investors and stakeholders. By combining technical expertise with responsible business practices, these enterprises can position themselves as leaders in the green economy.

Why is this relevant for investors and business leaders?

For investors, understanding the dynamics of renewable energy markets helps identify opportunities that align with sustainability goals. Whether it’s supporting SMEs like NewCo or investing in large-scale projects, the potential for long-term returns is immense. For entrepreneurs and business leaders, adopting a stakeholder-centric approach is essential for building resilient and responsible renewable energy businesses.

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Joost Notenboom

Joost Notenboom, a seasoned professional with experience in professional services, banking, investment, and funds management, is currently the Head of ESG & Sustainability at Omnes Capital, a French private equity firm focusing on energy transition and innovation, aiming to combine positive societal impact with attractive financial returns.

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