Boomers as a Linchpin

Jessica Lynn

9.20.20

A point has been made recently, renewable energy is denser in comparison to oil & petrol. Causing me to question my own consideration of the topic, I did some digging. Leiden University in the Netherlands developed metrics to investigate if this was a true statement “power density – the average electrical power produced in one horizontal square metre of infrastructure.” (Leiden University, 2018). The end results of their study showed renewable energy (biomass, solar, wind etc.) took “40-50 times more space than coal and 90-100 times more space than gas.” (Leiden University, 2018) However, it costs more to utilize oil as a major energy supplier “US it now costs more to generate additional electricity by burning more fossil fuel in existing plants than it does to buy it from a new utility-scale onshore wind or solar PV farm.”(Varadarajan, 2017). Even though big oil may ultimately take up less space, it’s a dirty business, renewables are less polluted and can be created for a myriad of uses (I.e. farming, power microgrids).

Millennials and Gen Z are quickly gaining reigns as the majority; the population “largest generation in US history, even bigger than the Baby Boomers – wants renewable energy.“ (Varadarajan, 2017). As Baby Boomers step into their golden age, having less of a strong hold on corporate and social infrastructure, creates a new dynamic and possible linchpin to renewable energy. Known as the “greatest generation” are reaping the wealth of the post WWII economy. The scenario with baby boomers is unique, creating an exposure to wealth no other generation had or are likely to encounter. Global population in 2100 is projected to be 11 Billion, and those over the age of 60, 1.4 Billion (Imbalanced Population Growth, 2020). Unemployment is becoming an increasing concern with more than 50% in some nations, acting as a direct barrier for millennials to be a contributor to our economy. Technology as a major driver, is well supported by millennials. Innovations and collaboration lead to the expanse of accessible resources. Direct result is higher employment and opportunity rates. This lowers the chance of population imbalance. Additional research shows three factors; aging, fertility, and migration are indicators in this dynamic.

In 2016, American Wind Energy Association (AWEA) held a conference in New York which introduced a new finance opportunity for the next generation “Clean Energy Investment Trust (CEITs) – will still be publicly traded listed vehicles, but instead of a growing portfolio of assets, each CEIT will consist of a fixed portfolio of assets generating reliable cash flows over the life of the vehicle.” (Varadarajan, 2017). The purpose of CEITs is to create a new finance structure opportunity for the next generation “low costs of generation, low demand growth, falling prices, and subsidies that are scheduled to phase out over the next decade.” (Varadarajan, 2020). CEITs mission is to convert what was considered not liquid into liquid investments. By doing so it opens the market to a diversified range of investors. The expected growth potential is significant with “implicit unlevered cost of equity by nearly 200 basis points, from 4% to 6%.” (Varadarajan, 2020)

One size does not fit all when it comes to renewable energy structure and development. However, with the plethora of existing energy models there’s a great opportunity to learn and collaborate. Why start from scratch, when there are lessons learned and objective feedback from more seasoned renewable energy initiatives?

Resources

Benefits of Renewable Energy Use. (n.d.). Retrieved September 18, 2020, from https://www.ucsusa.org/resources/benefits-renewable-energy-use

Home. (2020, September 14). Retrieved September 18, 2020, from https://www.rockefellerfoundation.org/

Imbalanced Population Growth. (n.d.). Retrieved September 18, 2020, from https://www.futureagenda.org/foresights/imbalanced-population-growth/

Local Renewable Energy Benefits and Resources. (2019, August 13). Retrieved September 18, 2020, from https://www.epa.gov/statelocalenergy/local-renewable-energy-benefits-and-resources

Rising Youth Unemployment. (n.d.). Retrieved September 18, 2020, from https://www.futureagenda.org/foresights/rising-youth-unemployment/

Leiden University. (2018, August 28). Renewable energy sources can take up to 1000 times more space than fossil fuels. Retrieved September 18, 2020, from https://phys.org/news/2018-08-renewable-energy-sources-space-fossil.html

Varadarajan, U. (2017, April 26). Millennials: The new power generation fueling the future with clean energy. Retrieved September 18, 2020, from https://www.climatepolicyinitiative.org/2016/10/12/new-power-generation-transforms-the-clean-economy/

Varadarajan, U. (2020, September 01). Beyond YieldCos. Retrieved September 18, 2020, from https://www.climatepolicyinitiative.org/publication/beyond-yieldcos/