Energy Transition

Ecofin's energy transition capabilities focus on secular growth opportunities related to changes in the way energy is produced and consumed. The sectors exposed to the energy transition include utilities, technology, cleantech, industrials, mobility, specialty chemicals and waste.

Long-term structural changes underway

We see three major shifts underway within energy globally

  • "Electricity wins", potentially doubling its current market share over the next 30 years
  • Within electricity generation, renewables and natural gas are displacing coal
  • Technology and process innovations are leading to continuous improvement in efficiency and reductions in emissions

These trends are creating secular winners and losers, resulting in major investment opportunities

 

The energy transition value chain

Commentary Sustainable Infrastructure 2/21/2020

How utilities in transition are transforming the electric power sector

Around the world, the electric power sector is undergoing a profound transformation driven by the...

Investment process

Qualitative analysis

  • Company strategy and growth prospects
  • Business model and risk assessment
  • In-depth regulatory analysis
  • Management strength
  • ESG factors
  • Energy transition thematic

Quantitative analysis

  • Proprietary modelling of earnings and cash flows
  • Balance sheet strength and credit rating
  • Sensitivity analysis
  • Sustainability and carbon emissions assessment

Relative value analysis

  • Peer analysis
  • DCF, regulated asset base and multiple analysis
  • Total return approach: capital appreciation and dividend
    prospects

Investment universe

Sources of Global Greenhouse Gas Emissions

  • 26% energy supply
  • 19% industry
  • 13% transport
  • 8% residential & commerical buildings
  • Other (forestry, water, agriculture)

Sectors

  • Transportation
  • Technology and clean tech
  • Infrastructure, utilities and renewables
  • Speciality chemicals and materials
  • Industrials
  • Environmental

Thematic research

  • Emphasis on reducing carbon emissions and using resources more efficiently
  • We identify four broad themes to develop our investment universe