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CONTRIBUTORS

Andrew Chambers

Portfolio Manager,
Real Assets,
Martin Currie Australia

This is a chapter from the Franklin Templeton Institute paper, Energy transition: Accelerating investment opportunities. To read all chapters in this paper, download the complete PDF or click here.

Chapter preview

Capital expenditures required to support the transition to clean energy and electric options are staggeringly large. Expansion requires significant network capital expenditure, additional storage, smart grids and energy efficiency. Australia is planning to provide reliable and affordable electricity across all regions, while supporting population growth. This growth in the electricity network provides opportunities for listed utilities to grow. India’s population growth, and particularly a growing middle class, lead to growth in anticipated demand for installed electricity capacity at 9.5% per year!1

These investments will completely remake the mix of energy sources. In so doing, once “boring” or stable listed utilities will have additional spark in the years ahead as an investment.

We encourage you to read the rest of the chapter to learn Martin Currie’s views from a real asset investment standpoint on these capital commitments, including:

  • The electrification transition coupled with a growing population requires triple the current generating capacity.2 In some emerging market countries, electrification involves connecting entire communities to electricity for the first time.
  • Existing electricity transmission networks will require lengthening and expanding as newer, renewable sources are often captured in many different locations.
  • Increasing need for storage solutions (incorporated into existing grids) means growth in batteries, pumped hydro or potentially newer technologies such as hydrogen.

This is a chapter from the Franklin Templeton Institute publication, Energy transition: Accelerating investment opportunities. Arguably, humanity’s greatest current challenge is the need to shift to low and net-zero carbon in a little less than 30 years. New technologies are accelerating the renewable energy transition while reducing environmental impacts. The renewable energy sources of today and the future require new and smarter technologies as well as the rapid creation of new infrastructure. These challenges create investment opportunities as investors have a critical role given the capital required to fund this transition. To read the full paper and explore views from across our specialist investment managers, download the complete PDF or click here.

Endnotes

  1. Source: Central Electricity Authority. Report on optimal generation capacity mix for 2029-30. January 2020.
  2. Source: IRENA. 2023. World Energy Transitions Outlook 2023: 1.5°C Pathway; Preview. IRENA: Abu Dhabi.

 

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The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice.

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