Climate Change and Investment Risk

I was driving through the countryside this weekend and through the catchment area for one of my pet investments.  Rumbling bridge hydro.

I have had a soft spot for cooperative finance and I’ve been investing in Peer to Peer investments for over 10 years but a couple of years ago I came across this type of energy cooperative.

Basically, the cost of building a wind turbine or solar park is too much for one person alone – so a group can get together and do it themselves.  Power to the people (quite literally) and money to the investors in the form of RPI linked credits for power generated for the next 25 years.  Returns are variable and long term are probably about 6% and the schemes even qualified for EIS tax relief at 30% back in the day – not so anymore. The trailing yield for me is 6.85% at the moment or around 9.7% with EIS relief included.

Anyway, I was looking for long term income to power FIRE and this looked like a good idea.  I’ve about 4% of my net assets invested in 5 different schemes which should give me about 10% of my required FIRE income.

Back to the story, I was wondering how well the Rumbling Bridge Hydro project was performing.  After all, I’ve put my money into the scheme and I want a good return.  But considering it’s been bone dry in Scotland for a long time and that much mean that the scheme is either not generating any electricity or hardly any at all!

No water = No Money! No wind = No Money! No Sun = No Monday!

Ok – you won’t get all of these things happening at once – but the impacts of global warming will been seen over the next years.  It’s maybe a question more for the grid operator and not for the private investors, but it doesn’t mean we shouldn’t think about it.

This summer has led to melting roofs and roadshosepipe bans and bumper crops of fruit but nobody to pick them.  The bad winter means more spend to fix potholes. The beast from the east caused no end of problems.

Ideally, you want to get on the side of the people who fix the problems and not that of who pays for the problem.  I’m not sure if I should do anything with my portfolio and investments to be honest.  I have an allocation of money in infrastructure already and I don’t think I need to change that for now.

For now, I’ll just enjoy what’s left of this amazing summer.  Who knows how long it will last and anyway, we are probably due a hurricane, floods or something like that before too long.

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