Renewable energy market outlook for 2025

The interest in renewable energy development projects saw clear signs of recovery in 2024, driven by the decline in interest rates. At the same time, significant portfolio transactions and industry mergers and acquisitions were observed, such as the sale of OX2, one of Finland's largest wind power developers, to the Swedish private equity company EQT, and the sale of Enersense's wind and solar power project development business to Fortum.

 

A notable event for UB Renewable Energy Fund (AIF) was its first investment in a 30/60 MW battery storage development project in Kemijärvi, implemented in collaboration with AmpTank Finland. Additionally, the fund's own wind power development projects in Finland advanced as planned, with a total capacity of approximately 600 MW.

 

Positive Outlook for Renewable Energy in 2025

 

The start of the year seems favourable for the renewable energy markets. Project transactions in Finland and the Baltic region are expected to significantly increase compared to recent years. UB Renewable Energy Fund also aims to acquire several new projects in 2025, with many of these likely to be located outside Finland.

Finland’s electricity consumption has remained relatively stable in recent years. The increased consumption capacity required by the electrification of society is still partly under construction, but results from energy efficiency initiatives are already visible. In contrast, electricity consumption in the Baltic States has already increased significantly. These countries are striving for greater energy independence and moving away from polluting energy production methods.

 

In Finland, several large data centres are currently under construction. For example, tech giant Google is planning significant expansions in Kajaani and Muhos. Several district heating companies are building electric heat production capacity, and Finnish Green North Energy is developing a large green ammonia production facility in Naantali.

 

Renewable Energy’s Central Role in Combating Climate Change

 

The green transition and the phasing out of fossil energy sources are crucial for tackling climate change. This urgency is underscored by the fact that nearly all countries have committed to the Paris Climate Agreement, covering 98% of global greenhouse gas emissions.

 

The Russian invasion of Ukraine has further accelerated the green transition in Europe, as countries strive to increase their energy independence and reduce reliance on Russian energy imports as quickly as possible.

UB Renewable Energy Fund’s Profit Potential Relies on the Growing Demand for Renewable Electricity

 

UB Renewable Energy Fund’s prospects are positive in the current market environment. The need for renewable energy production capacity is growing continuously, which will drive further development. The only emission-free alternative to wind and solar power is nuclear energy, but its licensing processes are slow and its construction costs are high.

 

The fund’s goal is to become a significant renewable energy producer, focusing on ongoing internal project development. This enables returns for investors both from the cash flow of operational plants and from the value creation driven by project development. Geographic diversification across different electricity market regions helps balance the volatility of revenues from energy sales. Electricity price forecasts and project valuations impact the fund's value through both future cash flows and valuations.

The fund's investment focus is currently in Finland, as its own project development is concentrated there. Finland remains a favourable market for renewable energy development, and its weight in the portfolio will remain significant. 

 

Investments will also be made outside Finland, with a goal to operate in a few well-diversified markets. Although the geographical mandate for investments is Europe, the fund will place increasing emphasis on the Nordic and Baltic regions in the coming years. Suitable target technologies include onshore wind, solar power, and electricity storage systems.

 

United Bankers' renewable energy fund:

 

 

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Renewable energy has the potential to replace fossil fuel energy sources. UB Renewable Energy Fund invests in wind power, solar power, and innovative renewable energy solutions, especially in Finland. The fund both develops greenfield wind power projects and invests in brownfield renewable energy projects already in operation.

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The information presented is based on UB’s own estimates and sources considered reliable by UB. The information on which the conclusions are based may change quickly and UB Group may revise its market view without prior notice. No information obtained through this presentation should be construed as a solicitation to invest. When making investment decisions, readers should base their decisions on their own assessment of the investment and the risks involved, and to consider their personal goals and financial situation.

 

Investing in funds always involves financial risk. The value of an investment in a fund may go up or down and you may lose some or all of the capital invested. The past performance of a fund is not a guarantee of future performance and cannot be used to predict future returns. The target return set for a fund may not be achieved. The risks are set out in more detail in each fund’s key information document and in the fund prospectus. Before making an investment decision, investors should consult the fund’s key investor information document, fund prospectus, rules and price list, which are available on each fund’s website. The funds are managed by UB Fund Management Company Ltd. The portfolio management of the funds has been outsourced to UB Asset Management Ltd.