Investors to increase exposure to energy-transition assets, says study

Feb 20, 2019
Energy storage offers greatest investment potential

In three years almost half (49 percent) of institutional investors expect to increase their exposure to assets supporting and participating in the so-called energy transition, according to a new study by German alternative asset manager Aquila Capital.

This transition involves the progressive replacement of fossil fuels by renewable sources of energy production. The research reveals and analyzes the popular parts of the energy transition among institutional investors and the most attractive opportunities.  

Nearly two thirds (63 percent) of investors cite energy storage as offering the greatest investment potential, followed by electricity transmission (45 percent) – which involves building and operating the links from power plants to substations – and the interconnectors between energy grids (41 percent).

According to the study, energy storage is becoming particularly appealing because of the growing role it will play in maintaining the supply of renewable electricity to Europe overall. Aquila Capital thinks cost reductions, technology development and improving regulations will continue to strengthen the investment case for storage in the future.

The study reveals the considerations that make participating in the energy transition more appealing financially for investors: cited by 68 percent of investors is the increasing share of renewable sources in the energy mix, followed by the restructuring and decentralization of energy grids (62 percent).

Susanne Wermter, EMEA head of investment management energy and infrastructure at Aquila Capital, says in a statement: ‘These findings underline the growing appeal of the energy transition among institutional investors and the opportunities they find most appealing.

‘Indeed, 82 percent of investors say they would be attracted by a multi-asset class fund mandated to invest in renewable energy generation, storage and transportation.’

 

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