The best play on renewable energy

'Alternative' energy is all well and good, but it can be unreliable. If there is no wind, the lights don't come on. But 'grid-scale' power storage is evolving quickly. That will change the economics of the industry, says Nick Hanna. Here, he tips the best way to invest.

On Monday 6 September, a record 10% of Britain's electricity came from wind power, equivalent to the output of four nuclear power stations. Industry bodies such as RenewableUK cheered the news but sceptics noted that the 10% figure was only hit because the turbines were running at full tilt in windy conditions, while demand was lower than normal.

This sums up the problem with renewables matching supply to demand. If the wind has to be blowing for the lights to come on, then clearly you can't rely on that power source alone. But if you could store 'surplus' energy it would be a different matter. Not only would it allow energy to be saved for periods when demand is higher, but it also changes the economics of wind farms. If electricity produced during off-peak periods can be stored then sold during peak periods when prices are higher, it means better returns.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up