Morningstar - Q1 2020 - 17
Dispatches
Global Briefs
TRENDS
Rise of Renewable Energy
Today, renewable energy accounts for just 7% of
U.S. energy consumption, excluding hydropower.
But Morningstar Research Services' equity
analysts think that U.S. renewable energy-mostly
wind and solar-will increase 142% by 2030,
surpassing 1,000 terawatt-hours and reaching 22%
of total U.S. electricity generation, excluding hydro.
The ramp-down in solar and wind tax credits
during the next five years won't slow growth as
much as others assume. State renewable energy
standards will help fill growth gaps-as will
corporate purchases as technology, consumer, and
even oil and gas firms push into renewable energy
to build sustainability credibility. Morningstar's
forecast of 8% annual growth from 2018 to 2030 is
higher than global growth-rate forecasts and
higher than the 5.6% forecast from the U.S. Energy
Information Administration.
U.S. Renewable Energy (TWh)
2019
Additions 2019-2030
1,200
2030
78
1,000
1,019
421
813
800
600
520
400
200
0
Current
+
State Policies
+
Corporate Demand, Other
=
Morningstar Forecast
U.S. EIA Forecast
Source: Morningstar, U.S. Energy Information Administration. Excludes large hydropower.
Source: Morningstar. Data as of 11/30/2017
U.S. Renewable Energy (TWh)
2019
Additions 2019-2030
WeWork's Wild
Valuation Ride
421
AMERICAS
United States
The notoriety surrounding WeWork's delayed
initial public offering illustrates the need for
greater scrutiny of private placement investments
520
by mutual funds. Pricing of the troubled
office-leasing firm's shares varied not just among
2030
asset managers but in one case among funds
using the same subadvisor team. The
78
discrepancies illustrate
the problem of pricing 1,019
private placements in investment vehicles that
require daily liquidity. In the absence of the
market setting a closing price, big valuation gaps
sometimes appear. As a result, much lower
valuations hurt sellers and help buyers of
open-end mutual funds, while much higher ones
do the reverse.
Infrequent pricing can also mask risk. Even though
private companies like WeWork tend to be early-
1,200
stage companies with uncertain prospects
and a wide range of potential outcomes, their
1,000
shares can go a year or more without changing
in
price. Were their shares public, their prices
would probably fluctuate like emerging growth
800
stocks and that would 813
be apparent in the
heightened volatility of portfolios that own them.
The lack of regular public pricing, however,
600
damps volatility.
The plunge in WeWork's market value to around
400
$8 billion in October from $47 billion in
January 2019 caused quite a stir, but its slide
200
morningstar.com/lp/magazine
17
0
http://www.morningstar.com/lp/magazine
Morningstar - Q1 2020
Table of Contents for the Digital Edition of Morningstar - Q1 2020
Contents
Morningstar - Q1 2020 - Cover1
Morningstar - Q1 2020 - Cover2
Morningstar - Q1 2020 - 1
Morningstar - Q1 2020 - 2
Morningstar - Q1 2020 - Contents
Morningstar - Q1 2020 - 4
Morningstar - Q1 2020 - 5
Morningstar - Q1 2020 - 6
Morningstar - Q1 2020 - 7
Morningstar - Q1 2020 - 8
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Morningstar - Q1 2020 - 19
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Morningstar - Q1 2020 - 43
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Morningstar - Q1 2020 - 79
Morningstar - Q1 2020 - 80
Morningstar - Q1 2020 - Cover3
Morningstar - Q1 2020 - Cover4
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