Focus On 3 Green Energy Stocks Amid Worries of Tesla’s Bitcoin Carbon Footprint

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Summary

• A study has found that Tesla’s £1 billion investment in bitcoin has carbon footprint
• The total investment made by the electric car manufacturer is worth 1.8 million cars’ annual emissions
• Since October, bitcoin has risen more than 400 per cent and reached a new high of more than $61,000 recently

Bill Gates, in a recent interview with the New York Times, said that he was sceptical of Bitcoin and said that the cryptocurrency was not climate friendly as it used much more electricity per transaction. He was alluding to a host of studies that have shown that mining bitcoin puts the planet under pressure.

Supporting his apprehensions, a study has now found that the recent £1 billion investment made by Tesla (NASDAQ:TSLA) in bitcoin has a carbon footprint that could compete with 1.8 million cars’ annual emissions.

Last month, in a security filing, Tesla disclosed that it has invested £1 billion in bitcoin and might also accept cryptocurrency as a mode of transaction in future. Tesla CEO has also said in an interview that he is a believer in bitcoin.

Also read: Elon Musk’s Romance With Cryptocurrency

A network of computers called miners processes transactions and returns rewards. As the network increases, rewards decrease which means that more computer backup becomes necessary, leading to more electricity consumption and more carbon dioxide emissions.

Analysts of the study said that the complexity of the system gives rise to an environmental cycle of rising carbon dioxide emissions. The study comes at the backdrop of soaring bitcoin popularity. Since October, it has risen more than 400 per cent and reached a new high of more than $61,000 recently.

Though recent studies put Tesla’s commitment to creating green credentials on hold, there are green stocks that may not have bitcoins popularity yet but has a good dividend yield. Here are three stocks from the renewables space with over 5 per cent dividend yield:

Also read: Renewable stocks in focus as government subsidises onshore and solar projects

Gore Street Energy Fund Plc (LON:GSF)

This equity investor, which invests in and manages assets in the renewable energy space, has a dividend yield of 8.49 per cent. The fund’s board last week announced an interim dividend worth 2 pence each share for the period 1 October 2020 to 31 December 2020.

It also announced that since 31 March 2020, the fund’s net asset value (NAV) had increased 5.29 per cent to 99.6 pence per share from 94.6 pence per share. Due to market uncertainties, the company announced a dividend target of 7 pence for each share.

The company’s total NAV return was 10. 9 per cent. The fund has a one-year return of 16.67 per cent.

The shares were trading at GBX 105, down by 0.94 per cent on 18 March at 10:07 GMT+1.

The Renewables Infrastructure Group Limited (LON: TRIG)

This FTSE 250 British investment trust has a dividend yield of 5.46 per cent. The trust creates investments in assets involved in making electricity from renewable sources.

The company declared that in FY20, its portfolio created 3,953GWh of electricity, compared to 3,036GWh in FY19. The NAV per ordinary share as on 31 December was 115.3 pence, compared to 115 pence as of December 2019. It also announced dividends of 6.76 pence each share as per the target for 2020, against 6.64 pence a year ago.

The stock has a one-year return of 11.85 per cent. The shares of the group were trading at GBX 123.73, down by 0.07 per cent on 18 March at 10:35 GMT+1.

Also read: Bitcoin: A New Asset Class Or Greatest Bubble Of All Time?

Greencoat UK Wind Plc (LON:UKW)

The FTSE 250 closed-end investment trust has a dividend yield of 5.59 per cent. The trust invests mostly in wind farm projects that have a capacity of over 10MW.

For FY20, the company’s return on investments increased to £154 million against £88.27 million. Its profit after tax increased to £104 million from £43.29 million. The company’s NAV as on 31 December was 122.2 pence. The board recommended an interim dividend worth £32.4 million, which equates to 1.775 pence each share for the three months ended 31 December. The total dividend for the year was £118.7 million, which is a dividend of 7.1 pence per share.

The stock has a one-year return of 7.17 per cent. The shares of the company were trading at GBX 127, up by 0.48 per cent on 18 March at 10:50 GMT+1.