Investing in Electricity
The renewable energy markets are slowly but surely catching the attention of small and big investors alike. A report released by the World economic forum, titled Developing Renewable Energy Capacity . Addressing Regulatory and Infrastructure Challenges in Emerging Markets" explores the problems faced by the electricity market. The need of the hour is to invest in all stages of the electricity market to provide steady transmission to networks and ensure a clean and sustainable source of energy, while also gaining steady profits. Government expenses on the renewable energy markets alone are not enough for the market to become a competitive player. The problems of regulatory and infrastructure need to be analysed and addressed in the initial stages itself. In the global market scenario, there has been a marked increase of investments in the electricity markets. Despite this, the renewable market still encounters challenges to firmly spread its roots, especially in the emerging new markets.
Why invest in electricity
The current electricity market offers a lot of attractive opportunities for investors while also promising significant returns. Population growth in the coming years is expected to surge and thus increase the demand for electricity supply. This seems a promising scenario for the electricity market. The need for renewable energy is expected to rise in proportion to the growth of the urban cities. The emerging countries in the electricity markets are promising as they are not already hassled with old infrastructure. This makes it relatively easy to build newer and faster systems of infrastructure for supplying electricity. Electricity is not only a source of consumption; it is also a means of establishing prosperity, especially for the developing countries. Industries, power plants, various development projects and cities need electricity to survive and flourish. This fact is more prominent in emerging electricity markets, thus ensuring sustained, steady and profitable returns for investors in the electricity market. Most of the countries in the emerging electricity market have abundant resources such as biomass, geothermal resources, solar power and water bodies to set up electricity generating plants. The electricity market, thus promises to be a profitable market for investors. Here, an investor not only gain significant returns from their investments, but also contributes towards a clean, green and sustainable planet.
Various ways of investing in electricity
- Investing in electric car company: The depleting oil reserves and the rising demand for fuel, has prompted the need for alternative and renewable energy. As the fuel and oil prices continue to soar, the demand for electric cars will increase in proportion. Thus, investing in electric car companies is a profitable venture and also a hedge against the current fuel prices.
- Shares:In the current world economy the prosperity and development of nation is entirely dependent on its power supply. Thus buying shares of companies in the electricity market guarantees good profits and also raises your share price as electric energy is something we cannot do without.
- Futures: Electricity futures under the ticker symbol JM in US dollars and cents per Mwh are traded on New York Mercantile Exchange. A single electricity futures contract is 40 Mwh per peak day, on the New York Mercantile Exchange and depends on the month. The number of megawatt hours vary based on the peak days in a month.