Putting the Red Flag in the Renewable Energy Sector

Updated: Sep 25

Renewable energy, electric vehicles, green industrial revolution – all these big words are part of the EU and UK shared vision of the future. They have governmental support in terms of funding and policies, and they might be luring companies to engage in innovation endeavours, investing precious workforce, capital and energy into a promising future. 

The vision is good; it is noble and, as we have shown in the first part of our research published in July, it is one thing that the UK and UE agree on completely. However, “Brovid” is looming over the UK economy, and that should raise the first red flag. 

Brovid is what some public commentators are now referring to when talking about the disastrous combination of a no-future relationship deal Brexit and the second wave of the COVID-19 pandemic. 

Many companies’ resources are scarce. Insolvency is the proverbial sword of Damocles hovering over business owners and C-levels’ heads, and the green energy, decarbonization, next-gen battery, electric vehicles sectors also present some underlying complexities and nuances that might escape the eye of the beholder. 

We donned the eye of the researcher and dug deep in these four booming and noble sectors and raised some other red flags. 

Why Mix Red (Flags) with the Green Renewable Energy Sector? 

According to the Oxford English Dictionary, back in 1602, military forces were indicating they were preparing for battle through a red flag. Some 100 years later, the  red flag  became a signal for danger when referred to the warning of a flood.

Nowadays, you might encounter a red flag when you’re on the beach, and the lifeguards are telling you the waters are too troubled for swimming by raising a red flag.  

This is exactly what we’ve been doing. We’ve checked the forecast in the energy sector and realized that the revenue and cost schemes change rapidly and that makes financial projections highly unreliable. 

Why a Red Flag in the Electric Vehicles Sector? 

Most carmakers are already betting their money heavily on the EV. However, a disruption in the supply chain might stall things, which leads us to believe that the timeline of the EV becoming mainstream might be longer than expected, and this increases the risk of investment. 

The Next-Gen Battery Sector Also Receives a Red Flag

Developing batteries that are cost-effective, high-quality, safe, low-weight and highly-recyclable is a noble vision. Still, there’s a big red flag blowing in the wind here: the cost and supply chain uncertainties. 

The Industry Decarbonization Red Flag

This is a trend that seems on an ascending slope, but unfortunately, it is highly dependable on huge investments and exogenous industries. 

In the context of the Covid-19 crisis and BREXIT, investing scarce resources in these booming sectors of the future might not be a good idea. We have chosen these specific four industries (decarbonization, green energy, electric vehicles and next-gen batteries) because they’ve been the subject of numerous controversies regarding the global economy priorities in a post-COVID-19 world. 

Our research is not final; we will continue to ponder and ask questions. For example, is it a choice to make between decarbonization and short-term profitability? The European Commission President has recently pledged that the EU will drive a sustainable and transformational recovery with respect to the Coronavirus pandemic. Is this the way to move forward? 

We shall research, and we shall see. Until then, you can download our e-book here.