A US investment firm has announced interest in investing in Australian renewable energy while expressing a negative view towards continued investments in coal, effectively saying that coal is dead.
Blackrock CEO speaking to the Australian Financial Review spoke of the difficulties with eliminating coal immediately. He however did believe that any new investments in the fossil fuel are pointless and bad business, as well as the obvious negative environmental impacts.
He also believes that this change in perception in renewable energies has come as their price has gone down, the days of enticing subsides as the selling point being a thing of the past.
“Coal is dead”: Bad business sense
Mr Barry, who is based in Dublin, said the changes are largely down to the now head to head nature between coal and renewable energy, saying that Australia in many ways is just avoiding the inevitable.
“It’s been amusing sitting back and watching Australia from afar because in effect it’s been denying gravity,”
“Coal is dead. That’s not to say all the coal plants are going to shut tomorrow. But anyone who’s looking to take beyond a 10-year view on coal is gambling very significantly.”
He also believes that Adani’s proposed $16.5 billion Carmichael coal mine is short sighted and didn’t provide any long term prospects for Australia.
The situation is the same in the US where he claimed no board of directors would make a 30 year investment in coal.
Size of the market
According to the International Energy Agencies fact sheet for 2016 is it is estimated that the global renewable energy industry is worth more the $300 billion US ($403 billion AUD) as compared to $20 billion ($26 billion AUD) last decade.
In his interview however he called on Australia to be clearer about its renewable future and how it aims to meet its 2020 and 2030 targets.
“It’s better for everyone to get that clarity sooner rather than later because it allows for more-functional investment …when you get policy volatility you get very dramatic stop-starts in investment.”
US-headquartered BlackRock, which has more than $5 trillion US (AUD $6.71 trillion) of assets under management and claims to be the world’s largest investment group, will invest around 10% of its funds in Australia from a new fund set up for renewable power.
