Please see today’s daily update from EPIC Investment Partners received this morning:
Following up on our recent All Solid State Batteries article, Bloomberg New Energy Finance (BNEF) recently published some interesting data on investment in energy transition by country/region and ‘technology’ in 2023 and, in addition, some detailed forecasts on emissions abatement for the period 2024-2030, 2031-2040 and 2041-2050.
In 2023 the global spend on energy transition totalled US$1.77tr, 17% more than 2022. By region China (46.5%) led the way while the US (21.8%), Europe (17.8%) and RoW (13.9%) made up the balance.
Currently the four major investment sectors are wind, solar, electrified transportation, and power grids. The last, power grids, does not generate green power but is the anchor, or linchpin, between renewable generation and electrified transportation.
BNEF’s forecasts for emissions abatement for 2024-2030 are – to state the obvious – forecasts and the 2031-2040 forecasts even more of a ‘finger in the air’ exercise but both are revealing and instructive.
Carbon Capture and Storage (CCS) is forecast to account for 17.6% of carbon abatements during 2024-2030 period. The other three main contributors are solar (30.3%), wind (20.7%) and electrification (14.2%). No other sector accounts for more than 5% (including nuclear).
The surprise for this author was to note that solar and CCS forecast emissions abatement for the 2031-2040 period fall to 4.8% and 11.7% respectively. Wind ‘improves’ to 25.3% but electrification jumps from 14.2% to a whopping 34.6%. CO2 emissions abatements climb from 16.9bn tons in 2024-2030 to 21.9bn tons in the 2031-2040 period, a miserly 2.66% CAGR reflecting the technical difficulties and elevated cost of CCS.
Conclusion – high voltage transmission cable producers are, we believe, a sure bet for the next decade. They may even outperform Nvidia! We understand that a Gemini (Google’s AI powered search tool) search uses almost ten times the power compared to an old-fashioned Google search. May be worth hanging on to those battery manufacturers as well.
Please continue to check our blog content for the latest advice and planning issues from leading investment firms.
Charlotte Clarke
11/06/2024