From MoneyWeek · · 1m 50s
Renewables Investment Opportunity Amid Energy Security Shift
Trump's fossil fuel push and Iran conflict boost renewable energy investment potential.
In brief
Trump's fossil fuel push and Iran conflict boost renewable energy investment potential. Renewable energy faces short-term headwinds but long-term investment opportunity due to energy security needs and AI infrastructure demand. Originally reported by MoneyWeek.
Trump's fossil fuel policy shift
US president Donald Trump's return to the White House in January 2025 has halted renewable energy projects through deals totaling close to $4 billion with TotalEnergies, Golden State Wind, Bluepoint Wind, Invenergy and RWE since…
“The administration has directly paid developers to simply stop: close to $4 billion across deals with TotalEnergies, Golden State Wind, Bluepoint Wind, Invenergy and RWE since march 2:2026”
Corporate retreat from renewables
BP cut annual transition spending to $1.5-2 billion, more than $5 billion below prior guidance, and scrapped its target to shrink oil and gas output by 2030.
“BP cut annual transition spending to $1.5-2 billion, more than $5 billion below prior guidance, and scrapped its target to shrink oil and gas output by 2030”
S&P index performance
The S&P Global Clean Energy Transition Index returned 9.3% in the 12 months to 7 October, but fell 26.8% since 2 June.
“The S&P Global Clean Energy Transition Index returned 9.3% in the 12 months to 7 October, and 5.3% in 2026 to date”
Energy security focus
The Iran conflict has renewed focus on domestic renewable energy to reduce reliance on imported fossil fuels affected by global events.
“The conflict [in Iran] reminded everyone of how the theme has developed over the last few years”
UK energy price surge
Brent crude oil rose 38.8% between 27 February and 6 October, breaching £2 per litre for diesel prices.
“Between 27 February (immediately before the Iran war) and 6 October, the price of Brent Crude oil rose by 38.8%”
Solar and AI demand
Solar power is critical for ai infrastructure with battery storage being the fastest solution for data centers needing immediate power.
“Solar and battery storage is likely to be built because they're the fastest thing to bolt onto a data centre that needs power yesterday”
Regulatory headwinds
UK government switched renewables obligation scheme to use consumer prices index for inflation, reducing long-term subsidies.
“In January, the UK government announced that the renewables obligation (RO) scheme, which incentivises energy companies to use renewable energy sources, will account for inflation using the consumer prices index rather than the (usually higher) retail prices index it had previously used”
Wind and solar challenges
Wind and solar face project-specific underperformance and lower power prices than historical assessments.
“There have been more headwinds within core renewables (wind and solar) than at any time over the last 10-15 years”
Investment opportunities
Operational wind or solar projects offer income, while early-stage investments provide capital growth with higher risk.
“If you're buying into an operational wind or solar project, that would be a greater focus on income”
Investment vehicles
Vestas Wind Systems, First Solar and Nextpower are listed companies, while funds like iShares Global Clean Energy Transition UCITS ETF track the index.
“Some of the largest of these are Vestas Wind Systems ( COPENHAGEN:VWS ), First Solar ( NASDAQ:FSLR ) and Nextpower ( NASDAQ:NXT )”
Long-term outlook
Wind and solar remain fundamental for decarbonization with potential for peaks and troughs in investor sentiment.
“Wind and solar are still absolutely fundamental asset classes for decarbonisation in the uk”
What matters most
Renewable energy faces short-term headwinds but long-term investment opportunity due to energy security needs and AI infrastructure demand.
