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Lego’s owners are planning to spend more on renewables, after determining that what used to be an merely an ideal-driven investment strategy now makes financial sense too, Bloomberg reports, citing the chief executive of the fund, Kirkbi A/S.
Kirkbi, which manages the billions of Denmark’s second-richest man and owner of the Lego brand, Kjeld Kirk Kristiansen, began investing in renewables in 2012. Last year, the profits from the fund’s investments in wind power tripled to about US$66 million (398 million kroner). Now, Kirkbi is planning on expanding into other renewable energy sources, chief executive Soren Thorup Sorensen told Bloomberg—notably solar.
Solar energy is becoming much cheaper fast and efficiency levels are increasing, Sorensen explained. Also, everyone is eager to invest in renewables, motivating an expansion beyond wind power.
Indeed, the more commercially viable wind and solar becomes, the more funds and other investment vehicles rush to the space. A recent Bloomberg New Energy Finance report estimated that solar power will in five years be cheaper than coal in many parts of the world.
Another report, released this month by the FS-UNEP Collaborating Centre for Climate and Sustainable Energy Finance, revealed that in 2017, investments in new renewable power generation capacity beat investments in fossil fuel capacity.
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Solar was the star, attracting US$160.8 billion in fresh investments in 2017, up 18 percent on 2016. That was more than half of all renewable investments, which came in at US$279.8 billion, excluding large hydropower projects. Also last year, the record for newly commissioned renewable installations was broken, with the total hitting 157 GW. This compares with 70 GW in new fossil fuel capacity.
Lego began investing in renewables in 2012 in a bid to reduce its carbon footprint and achieve parity between carbon emissions and renewable energy production. This it did last year—three years ahead of the deadline it had set for itself. Now that the renewable generation investments are paying off so well, it would only make sense for the global toy brand’s fund to expand its presence in renewables.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.