How you can invest in India’s sunrise industry
Renewable Energy
Background
Rapid industrialization of current developed nations during 19th and 20th century have resulted in global warming — rising average temperature of our planet. Majority of these countries used fossil fuels like coal, oil and gas, in order to meet their energy needs. Combustion of these fuels result in emission of greenhouses gases like carbon dioxide which are majorly responsible for global warming. Despite continuous warnings by scientists and researchers about the catastrophic and devastating impact of greenhouse gases, the world continues to use fossil fuels.
Where we stand now
For more than last 10,000 years, Earth’s temperature has fluctuated in a narrow band. Scientists believe that in order to safeguard our planet against any adverse impact of industrialization, temperature should not rise more than 2C, compared to pre-industrialization era. Temperature has already increased by around 0.8C and studies have showed that with current pace, it will surpass 2C limit by mid of this century. The WHO estimates that already around 141,000 people are dying annually because of climate change. The below graph from Vox shows predicted temperature increase under various emission scenarios
It becomes very clear that in order to protect our planet for future generations, bold and measurable steps are required immediately
What our leaders are doing about this
For the first time, in the Paris Climate Summit, around 150 countries, including India, have agreed to set targets toward reducing global emissions by submitting their NDCs.
India’s NDC submission
- India has promised investments in water resources, coastal regions, health and disaster management, besides major goal of reducing emission intensity of the GDP by around 35% over 2005 levels
- India also announced a solar alliance of 120 countries at the Paris climate summit. It will be headquartered in India, with our country making an initial investment of USD 30 million. The main aim of this alliance would be sharing of technology and mobilizing financial resources for further research and technological development
- India had set a target to enhance solar capacity of the country up to 20GW by 2022. Our prime minister wants to further increase this to 100GW, under the Jawaharlal Nehru National Solar Mission
- Similar targets have been setup to pump up wind power capacity across the nation. Government is also focusing on enhancing capacities of hydro and bio-mass based power plants.
Investment Opportunity
How you can invest in India’s green (energy) revolution
In this scenario, heavy investment is expected to come into the renewable energy sector, as India works towards becoming the largest green energy producer. For equity retail investors with a long-term horizon, it represents a good investment opportunity. At the same time, by investing in companies building clean energy capabilities, you will be encouraging much needed reform & change. To check how current developments have impacted renewable energy companies trading on Indian stock exchanges, we built an equi-weighted basket of liquid NSE listed companies focused on generating & managing green energy (a renewable energy smallcase). This portfolio outperformed the broader market by an 7% (approximate) in just 20 days, since the beginning of the Paris climate summit.
On the smallcase platform, you can get easy access to such fundamental, technical and theme based portfolios. Using our portal, you will be able to easily invest, track and manage these smallcases with just a few clicks.
