Why my enthusiasm for energy stocks is fading

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State involvement in the sector is a good reason for investors to tread carefully

I like spoonbills, and for a while I liked Ørsted. This may seem a curious juxtaposition — a long-legged wading bird with a ridiculous beak and the world’s leading wind farm operator. But there is a connection: the breeding of spoonbills on the Norfolk coast since 2010 is a sign of our warming planet. Out to sea a little further north, at Hornsea, Ørsted is building its third gigawatt-scale project. Its 12 UK wind farms generate enough electricity to power six million homes.

For example, as solar panel prices fall and efficiency rises, this is becoming more cost-effective than wind. But solar deployment is “significantly off track” says the UK parliamentary environmental audit committee, which blames barriers in the planning system. And the last offshore wind farm auction failed to attract any bidders because the government set the amount it was prepared to underwrite energy produced too low. Renewable energy requires better storage — either battery or hydrogen.

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