Sustainability shapes Queensland’s renewable future

Sustainability shapes Queensland’s renewable future

Wind and solar power are among the plans for increased use renewable energy

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A bar graph comparing HESTA’s four ready-made investment pools.

Renewable energies are the new online technology bubble

With Australia’s carbon price poised to encourage growth in the renewable energies sector, many companies within the sector are yet to translate their potential earnings into real earnings.

A director with FIIG Securities Brad Newcombe believes the renewable energy sector is shaping up to be the new online technology bubble of the early 2000s.

“While renewable energy will clearly be an important part of future growth, it is a question of how much of that earning potential is already priced in,” Mr Newcombe said.

“With the technology boom it was obvious technology would play an important part in our future, however ultimately this growth has never translated into earnings for many technology companies as the level of future profitability was vastly overestimated.”

HESTA, a major Australian industry superannuation fund was one of the first to introduce a sustainable investment option to investors back in 2000, now known as Eco Pool.

Although past performance is not a reliable indicator of future performance, data recently released on HESTA’s website for the 2010 financial year shows the Eco Pool outperformed HESTA’s three other ready-made investment pools.

Eco Pool also performed slightly higher than the Conservative Pool, Share Plus and Core Pool investment pools when comparing their five-year averages.

Considered an aggressive option for investors looking for above average performance, Eco Pool is aimed at investors who are ready to accept above average risk.

According to Mr Newcombe, a long term investment approach in the renewable energy sector is no more viable than any other sector.

“As with other investments it is purely a risk return equation, although for diversification purposes it would be good to have some exposure to the sector,” he said.

A spokesperson for HESTA was unavailable for comment.

Story by Sarah Cann