Energy saving can be good for the globe and the pocket

Nicola Donnelly and Jade Summer of Wheb say that it's time to look at low carbon energy investment

Nicola Donnelly, fund manager, Wheb Asset Management
Nicola Donnelly, fund manager, Wheb Asset Management

Ofgem recently announced that £200bn of investment would be required to move to low-carbon energy in Britain. Much of this will be spent on supplying energy more efficiently by upgrading the national grid.

Given the public spending cuts and other austerity-related headlines we are growing accustomed to, we need to wonder where on earth this money is going to come from.

It is suspected that any change to the national grid will have a direct impact on energy bills, which are often a major cost for charities, particularly hospices and care homes. At our firm, we support short-term spending on such important long-term infrastructure upgrades. The timing is not ideal but, given the state of our public finances, this really is a case of short-term investment for long-term gain.

The good news for investors is that a number of companies globally will benefit from similar infrastructure upgrades. Some to look out for are those that are aiding this shift to newer, cleaner and more efficient energy transmission. We see these forward-thinking companies as stepping stones to more sustainable energy provision, including the use of renewable energy sources.

Companies benefiting from these trends include American Superconductor, which makes components for wind turbines and grid infrastructure. Wind farm operators worldwide rely on this company's solutions to meet their wind farm-to-grid needs.

Another US company, EnerNOC, has energy management applications for real-time demand and response technologies, which can balance energy supply in peak times, thus avoiding having to fire up additional fossil fuel power stations at vast economic and environmental expense. The company was recently visited by the climate change minister, Greg Barker, who stressed that the "UK needs to revolutionise the way electricity is used".

The amount spent on energy infrastructure is huge and can only increase as we gradually make the transition away from a fossil fuel-dependent society.

Companies such as these offer significant energy cost and efficiency benefits. Ofgem has launched Project TransmiT to ensure it promotes security of supply and a low-carbon future, while keeping the cost of transmission to customers under control.

Isn't this something worth paying for in the short term? Charities should ask their fund managers how they are profiting from it.

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