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Energy sharing will be one of the trends of our generation
Life is getting more expensive. However, that doesn’t stop us from consuming more, with negative consequences for the climate. Sharing can offer a solution. Our economy is therefore undergoing a transformation from a traditional to a sharing economy. Think of things like intergenerational living, co-working, car sharing, and so on. ‘People can also share energy; for investors it’s best to be in on that trend from the beginning,’ says Jonas Theyssens of KBC Asset Management.
"We not only need to consume less energy, but also to use it differently. Since the Industrial Revolution, our energy consumption has grown exponentially. We are still mainly reliant on fossil fuels, but we are now fully aware that this is bad for our planet and that the Earth’s natural resources are being depleted," says Jonas Theyssens, Equity Analyst at KBC Asset Management. In theory, 'sharing' energy is already possible. In practice, however, we are still bound by the current limitations of the energy grid and regulation.
Everyone can share energy
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“The rise of green energy means anyone can generate your own energy, including you and me," explains Theyssens. "There will be times when you generate more than you consume. It has recently become possible to share these energy surpluses with other people, give them away or resell them. In a nutshell, you share the energy you have generated with others who are facing an energy shortage at that moment."
"There are different kinds of energy sharing", Theyssens continues. "First, you can share energy with yourself, for example if you have multiple properties. Secondly, you can share energy in a communal building, for example sharing solar or wind energy in an apartment building. And thirdly, it has recently become possible to share energy in an energy community. Local governments, businesses or citizens then join forces to invest in renewable energy together."
The big advantage is the relatively low cost, which also allows lower-income families to be part of it. This means that people who don’t have the space to install solar panels, for example, can also be involved. "The whole of society can participate in the energy transition. So everyone can do their bit and reap the benefits at the same time. Of course, you have to make proper arrangements and ensure it’s written down and above board, but from a technical perspective you don't need much more than a digital meter. The long-term challenge is much bigger for network operators and energy suppliers than for ordinary citizens.’"
The whole of society can participate in the energy transition. Everyone can do their bit and reap the benefits at the same time.
Jonas Theyssens, Equity Analyst at KBC Asset Management
Investing in the trend
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There are also opportunities here for investors. "At present, these are often local initiatives or start-ups. But eventually we will all have to share our energy; it’s one of the trends of our generation. Energy sharing helps optimise and secure our energy supply, as well as making it greener. By investing in the energy transition, investors are indirectly riding the trend of energy sharing. There are countless possibilities. It’s already possible to invest in manufacturers of solar panels or wind turbines, for example, or in sustainable construction companies. And it goes further than that. Investors can also look at companies that provide services in energy transition. For example, through a subsidiary, KBC guides and advises SMEs in their transition to a sustainable energy supply. Smart technology also offers opportunities for investors. Think of companies that make your homes smarter by enabling our appliances to communicate with each other, in order to improve energy efficiency."
Whether you are an asset manager, a company or an investor, it's all about jumping on the bandwagon early enough. If you wait until the big shifts are actually happening and the trend really takes hold, you are really too late. You have to take action and have faith in the future.
Jonas Theyssens, Equity Analyst at KBC Asset Management
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This article is informational only and should not be considered investment advice.
