Insights #15: Renewable Energy: Not Economically Sustainable

The energy transition requires huge investment into green infrastructure to meet UN climate goals; however, when profits are properly calculated, renewable energies are currently not economically viable. Despite lower capital costs compared to oil and gas firms—2.4% less on average—renewable energy firms struggle to create economic profits. This is primarily due to the large amounts of invested capital required for renewable energy firms to build out their infrastructure. Escaping the gravity of corporate value destruction indeed requires the renewable energy sector to expand and secure benefits from scale or reinvent their business strategies.

31 Jan 2024 · Sára Czégé, Camilla Erencin, Simon J. Evenett, Pierre Ledan, Adam Novak and Felix Reitz