Disclaimer: Views in this blog do not promote, and are not directly connected to any L&G product or service. Views are from a range of L&G investment professionals, may be specific to an author’s particular investment region or desk, and do not necessarily reflect the views of L&G. For investment professionals only.
Europe’s clean power transition – an opportunity among the challenges
It’s no secret that Europe has ambitious carbon reduction plans. Such an initiative – and the scale of investment required to achieve it – represents an enormous challenge but also, in our view, a potentially substantial opportunity for private markets investors.
Europe’s regulatory backdrop has been consistently supportive of a low-carbon energy transition. This is, at least in part, driven by a greater desire for energy security in addition to achieving emissions reduction. The scale of the investment required to meet targets, however, means that private capital will need to play a role. This type of investment is not just welcome; it’s essential.
Our recent paper, authored in partnership with NTR, looked at the potential investment opportunity Europe’s clean power transition presents.
Our key takeaways:
· There is a pressing need to support Europe’s ambitious emission reduction targets, particularly given the increasing demand for electrification.
· The continent has provided a continually supportive regulatory backdrop for clean power, something that looks set to continue as concerns about energy security persist.
· To support the greater role electrification will likely play in Europe’s energy transition, modern infrastructure will need to be developed with existing facilities upgraded.
· We believe, with careful asset selection, energy infrastructure may have the potential to offer attractive risk-adjusted returns coupled with possible environmental benefits.
You can read the full paper here.
Assumptions, opinions, and estimates are provided for illustrative purposes only. There is no guarantee that any forecast will come to pass.
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