1、KPMG IExploring eight key questions on energy transition investment and the organizations shaping the future of energyEnergy transition investment outlook:2025 and beyondIncluding new insights from 1,400 global energy transition investorsEnergy transition investment outlook:2025 and beyond|2 2024 Co

2、pyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookGeri is ESG Leader for the Asset Management secto

3、r and supports financial institutions to understand,assess,manage and report on a broad range of sustainability issues.Geri is experienced in sustainability policy development and implementation,the development of“net zero”strategies,the design and implementation of investment stewardship policies,a

4、nd ESG and climate reporting.Daisy Shen has 24 years experience with KPMG,including a long-term secondment to the KPMG Global Chairmans Office and the KPMG Energy Centre of Excellence based in London,where she gained invaluable international experience in executive management and cross border M&A tr

5、ansactions.Daisy is specialized in Strategy,M&A,Energy Transition,ESG and decarbonization,Sustainable Supply Chain Advisory,providing advice to corporates,financial institutions(including multilateral banks)and governments in climate change,energy transition,low carbon investment,ESG and decarboniza

6、tion(including Corporate PPA,energy efficiency)strategy.Geri McMahonLead of Global ESG for Asset Management KPMG InternationalDaisy ShenHead of Climate and Sustainability KPMG ChinaGrant is a Managing Director,M&A,Climate&Decarbonization,KPMG UK and leads on coverage and origination across the clima

7、te investment theme.He has 16 years of experience working in the M&A space in the energy sector,both as an advisor and as part of a private equity backed management team.Elizabeth is a Partner in the KPMG Private Equity practice.She has over 16years of experience serving both public and private clie

8、nts with assurance services as well as accounting and financial reporting related advisory services.Elizabeth is a leader in KPMGs rapidly growing sustainability assurance practice.In this role,she oversees the development and delivery of sustainability-related services,advises clients in developing

9、 best practices for sustainability measurement and reporting and leads engagements to provide sustainability and impact investing assurance services.Grant HillManaging Director,M&A,Climate&Decarbonization KPMG UKElizabeth MingLead of Global Sustainability for Private Equity KPMG InternationalAbout t

10、he AuthorsEnergy transition investment outlook:2025 and beyond|3 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.This research is designed to offer energy transition investors,policymakers,energy-in

11、tensive businesses and energy industry participants a set of thought-provoking insights into current and future trends that impact these investments.As the energy transition accelerates,massive investment opportunities are emerging across multiple sectors.These are driven by the need to expand renew

12、able energy capacity,improve energy and resource efficiency,and upgrade related infrastructure.This report tracks the investor perspective on the energy transition,emphasizing the importance of increasing,sustained and collaborative investment.It is based on a survey of 1,400 senior executives from

13、36 countries and 11 sectors who are working in organizations that are actively investing in the energy transition.We explore how a wide range of forces(such as public policy,market dynamics,technological progress and financial innovations)drive investment.We also consider how geopolitical uncertaint

14、y,regulatory risks and economic volatility pose challenges for many.Investors play a crucial role in the energy transition,as they can identify and capitalize on opportunities to drive progress.Strategic investments in decarbonization,efficiency,renewable energy and infrastructure are essential to a

15、ddressing the challenges posed by global warming.SummaryIntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookEnergy transition investment outlook:2025 and beyond|3Energy transition investment outlook:2025 and beyond|4 2024 Copyright owned by one

16、 or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookKey findingsDespite recent challenges,most say investment is accelera

17、ting swiftly Investors are active across a broad and diverse set of opportunities Investors see a role for fossil fuels in an orderly transition Partnerships are key to risk management Policy risks worry investors Even after a period of high interest rates and geopolitical volatility,investors are c

18、ommitted to pursuing investments in clean energy technologies and projects.of investors believe that investment in energy transition assets is increasing rapidly.are not making new investments in fossil fuel energy.72 percenthave invested in energy efficiency technologies(including electrification)o

19、ver the past two years.This range highlights the breadth of opportunities for investors,as each area of interest involves many different systems and technologies.Despite the rapid growth in renewables,all credible forecasts see fossil fuels playing a steadily declining yet vitally important role in

20、the energy mix over the next two decades.Recent years have shown how fossil fuels(natural gas,in particular)remain crucial to energy security,and further investment will be needed to meet energy demand as the transition proceeds.Collaborative approaches are vital to the success of energy transition

21、projects,as they allow businesses to share risks,resources and expertise.Partnerships across various industries and between public and private sectors reduce risks,not only through reduced financial exposure,but also by combining different advantages,infrastructure,influence,relationships and expert

22、ise.These risks are difficult for investors to manage,and the resulting uncertainty can delay or prevent capital flows from reaching energy transition initiatives.Stable,transparent and consistent regulatory environments can enhance long-term investment opportunities in clean energy and infrastructu

23、re.have invested in renewable and low-carbon energy.in energy storage and grid infrastructure25 percentOnly94 percentof energy transition investors prioritize finding partners who can share risks.64 percent56%54%51%to investing in energy transition assets.Regulatory or policy risks represent the top

24、 barrier in transportation and related infrastructureThe investmentsThe regionsEnergy transition investment outlook:2025 and beyond|5 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe

25、investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookContentsIntroductionFossil fuelsThe policiesThe motivesThe partnersThe barriersThe outlook12345678Energy transition investment outlook:2025 and beyond|6 2024 Copyright owned by one or more of the KPMG Interna

26、tional entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookIntroductionIntroduction Investing in the future of energyThe energy transition has created a vas

27、t,evolving world of investment opportunities across many sectors and reaching into all corners of the world.A diverse set of actors are pursuing these opportunities,including traditional energy industry participants,financial investors,governments,as well as new energy developers,renewable energy pr

28、oducers and energy-intensive businesses.KPMGs Energy transition investment survey captures perspectives from 1,400 energy transition investors from around the world.Each survey respondent works for an organization that invests in energy transition assets,1 including financial(e.g.banks,asset manager

29、s,venture capital,private equity and infrastructure funds)and non-financial entities(e.g.utilities,oil and gas,natural resources,automotive and transportation).Big investments and big questionsA strong majority amongst these investors (72 percent)believes that investment in energy transition assets

30、is increasing rapidly.Indeed,of the US$3 trillion in global energy investment expected in 2024 a record high some US$2 trillion will be in clean energy technologies and infrastructure,close to twice the investment in fossil fuels for the year.2KPMGs Energy Transition Investment Survey captures persp

31、ectives from 1,400 energy transition investors from around the world.1 In the survey and this report,“energy transition assets”refers to infrastructure or projects in renewable energy,low-carbon technologies,energy storage,decarbonization,and networks/grids,as well as to the infrastructure related t

32、o any of these.2 World Energy Investment 2024,IEA,June 2024Three quarters of this capital is from private and commercial sources underscoring the private sectors leading role in implementing the energy transition.3 The investors whose perspectives we explore in this research are involved in a divers

33、e range of opportunities.They play a central role in driving the energy transition forward and this makes several questions important:The following chapters explore these questions and related issues,uncovering the distinctive perspectives of todays energy transition investors.3 World Energy Investm

34、ent 2024,IEA,June 2024 1563748Which assets are organizations investing in,and why?What are the main barriers facing energy transition investors?Which regions offer the most attractive opportunities?How do policy conditions impact energy transition investments?Have energy transition investors stopped

35、 investing in fossil fuels?What role do partnerships play in energy transition investments?Why do investors choose energy transition assets?What do energy transition investors expect from the next two years?2The investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe out

36、lookEnergy transition investment outlook:2025 and beyond|7 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionWhich assets are organizations investing in,and why?The investments1Energy tran

37、sition investment outlook:2025 and beyond|8 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookOver the past

38、 two years,most respondents (64 percent)say their organization has invested in energy efficiency technologies(including electrification).This was the highest of all the asset types in question.The investmentsMany have also invested in energy storage and grid infrastructure transport and related infr

39、astructure renewable and low-carbon energy 56%54%51%Energy transition investment outlook:2025 and beyond|9 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe regionsFossil fuelsThe barr

40、iersThe motivesThe policiesThe partnersThe outlookThese top four areas efficiency,renewables,storage/grids and transportation comprise the bulk of the US$2 trillion expected global investment in energy transition assets in 2024.This figure includes US$771 billion in renewables,US$669 billion in effi

41、ciency and electrification(which includes transport,buildings and industry)and US$452 billion in grids and storage.4 Energy efficiency(including electrification)Renewable and low-carbon energyEnergy storage and grid infrastructureTransport and related infrastructureCritical minerals and materialsCar

42、bon capture,utilization and storageFossil fuels with offsets/decarbonization64%56%54%51%45%31%26%The broad scope of the transition means that investment isnt limited to traditional energy companies and projects.Instead,it extends to startups;tech companies;industrial,materials and natural resources

43、companies;energy-intensive industries;and services companies in the supply chain.4 World Energy Investment 2024,IEA,June 2024 Figure 1:Energy efficiency investments have been the most popular over the past two yearsThe investmentsInvestors are looking at everything from solar and wind farms to batte

44、ries,power grids,raw materials,synthetic fuels,green hydrogen and electric vehicle infrastructure.Dozens of emerging technologies like floating offshore wind,direct air carbon capture and synthetic fuels are also on the radars of some energy transition investors.A diverse range of technologies and s

45、ystems can improve efficiencyAll of the top four areas cover a wide range of systems,technologies and related infrastructure,but energy efficiency arguably offers the most varied opportunities.Gains can be made in many different contexts using diverse methods and technologies.These include improved

46、industrial processes,electrification,high-efficiency machines and appliances,improved building insulation,reflective roofing,daylighting and shading in building design,and the intelligent automation of lighting,heating,cooling and other processes.Energy transition investment outlook:2025 and beyond|

47、10 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookMany efficiency gains are enabled by digitalization,wh

48、ich opens investment avenues in areas such as the internet of things for energy management,artificial intelligence for grid optimization and blockchain for energy trading.5While individual projects in renewables,storage or grids often hit the headlines with high dollar-value or gigawatt capacity,ene

49、rgy efficiency investments are often less visible and encompass many smaller investments and optimizations.However,it is estimated that doubling the global rate of progress on energy efficiency could reduce energy costs by one third and deliver 50 percent of worldwide CO2 reductions by 2030.6The imp

50、ortance of the demand side of the energy systemLike energy investment,recently,global energy consumption hit an all-time high.7 This is not unexpected.Global energy consumption has increased in 22 of the 24 years of this century.The two exceptions are 2009(in the wake of the global financial crisis)

51、and 2020(during the COVID-19 pandemic).However,both 2009 and 2020 were followed by strong rebounds in energy consumption.In fact,2010 and 2021 recorded the two highest year-on-year increases in energy consumption this century.85 Digital technology:The backbone of a net-zero emissions future,MIT Tech

52、nology Review,March 20236 Energy Efficiency 2023,IEA,November 20237 2024 Statistical Review of World Energy,Energy Institute,June 2024 8 2024 Statistical Review of World Energy,Energy Institute,June 2024While individual projects in renewables,storage or grids often hit the headlines with high dollar

53、-value or gigawatt capacity,energy efficiency investments are often less visible and encompass many smaller investments and optimizationsThe investmentsEnergy transition investment outlook:2025 and beyond|11 2024 Copyright owned by one or more of the KPMG International entities.KPMG International en

54、tities provide no services to clients.All rights reserved.IntroductionThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlook-30-20-10010203040200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023Annual change in global energy cons

55、umption excluding renewables(exajoules)Annual change in global renewables consumption(exajoules)Global financialcrisisGlobalpandemicFigure 2:Year-on-year change in global energy consumption(renewables vs all other sources)The investmentsEnergy transition investment outlook:2025 and beyond|12 2024 Co

56、pyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlook0100200300400500600700200020012002200320042005200620072008200920

57、102011201220132014201520162017201820192020202120222023Global combined renewables renewable electricity consumption (including hydropower)and biofuels(exajoules)Global consumption,excluding all renewables(exajoules)This relentless growth in energy consumption underlines the enormity of the energy tra

58、nsition and the scale of the decarbonization challenge.Over the past 10 years,the growth rate in global renewable energy capacity,on average,has only served to(almost)cover the growth in consumption,doing little to reduce the worlds reliance on fossil fuels.This is why efficiency is so important.At

59、the 2023 United Nations Climate Change Conference(COP28),133 countries signed a pledge to double the global average annual rate of energy efficiency improvements,with the goal of sustaining a rate of at least 4 percent every year until 2030(up from the current rate of about 2 percent).10 Investors i

60、n assets,projects and businesses related to energy efficiency will have been encouraged by this commitment,and as we show in Section 8,many expect energy efficiency and electrification to continue to be an attractive area over the next two years.Figure 3:Total global energy consumption:renewables vs

61、 all other sourcesSource:Energy Institute Statistical Review of World Energy 2024.99 Renewables includes all forms of renewable electricity generation(including hydropower)and biofuels.“Global energy consumption,excluding renewables”refers to the consumption of commercially traded fuels and nuclear

62、power.Energy from all sources of non-fossil power generation is accounted for on an input-equivalent basis.Source data and further methodological details can be found in the resources and data section of the 2024 Statistical Review of World Energy.10 Global Renewables and Energy Efficiency Pledge,CO

63、P28 UAE declaration,November 2023The investmentsEnergy transition investment outlook:2025 and beyond|13 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil f

64、uelsThe barriersThe motivesThe policiesThe partnersThe outlookMost energy transition investors have focused on three regions over the past two years,with just over half pursuing opportunities in EuropeNorth America East Asia 54%52%52%Parts of Asia,Europe and North America offer favorable conditions

65、to investors across all(or most)of these factors.Some countries have many of the right conditions in place,but it only takes one or two issues to reduce investor interest.For instance,although many countries(and especially the worlds largest economies)have enormous market potential and many other ad

66、vantages,investment can be held back by factors such as political risks,immature market regulations or a lack of infrastructure.Which regions offer the most attractive opportunities?The Regions2The regionsEnergy transition investment outlook:2025 and beyond|14 2024 Copyright owned by one or more of

67、the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookInvestors in energy transition assets are looking at a range of factors when asse

68、ssing countries or regions,these include regulatory support,market potential,political stability,infrastructural readiness,environmental policies,legal frameworks,available skills,resources,local partners and more.The regions that are seeing the most investment have cultivated a blend of these facto

69、rs,offering investors an attractive riskreward proposition.Daisy Shen Head of Climate and Sustainability KPMG ChinaParts of Asia,Europe and North America offer favorable conditions to investors across all(or most)of these factors.Some countries have many of the right conditions in place,but it only

70、takes one or two issues to reduce investor interest.For instance,although many countries(and especially the worlds largest economies)have enormous market potential and many other advantages,investment can be held back by factors such as political risks,immature market regulations or a lack of infras

71、tructure.Rapidly maturing regions could offer new opportunitiesSeveral countries are becoming increasingly attractive to investors.In our survey,we asked respondents to choose which(one or two)regions were the most attractive for their organizations energy transition investments over the next two ye

72、ars.The expected top three emerged,with 43 percent selecting East Asia,39 percent North America and 35 percent Europe.However,one in five selected the Middle East and North Africa (20 percent)and Southeast Asia(20 percent).A range of developments may have brought these two regions into focus for inv

73、estors.In Southeast Asia,the establishment of the ASEAN Taxonomy for Sustainable Finance(and related guidance)has helped enhance transparency and credibility for capital providers.Launched in 2021,and updated in 2023 and 2024,this taxonomy has given organizations the confidence to advance their tran

74、sition plans.11 For instance,in 2024,Tenaga Nasional,Malaysias electric utility,relied on this guidance to become the first ASEAN utility to establish a framework for issuing sustainability-linked debt instruments.12 11 ASEAN Taxonomy for Sustainable Finance Version 3,Association of Southeast Asian

75、Nations,April 2024 12 TNB unveils groundbreaking Transition Finance Framework to support energy transition,The Malaysian Reserve,October 2024The regionsEnergy transition investment outlook:2025 and beyond|15 2024 Copyright owned by one or more of the KPMG International entities.KPMG International en

76、tities provide no services to clients.All rights reserved.IntroductionThe investmentsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookIn the Middle East,nations with some of the worlds largest oil and gas reserves have advanced plans to fund major investments in energy transitio

77、n assets.Saudia Arabia,for example,plans to increase its renewable energy generation capacity from 5 to 130 gigawatts by 2030.13 The UAE increased its renewable energy capacity by 70 percent in 2023 and plans to become a world leader in carbon capture and green hydrogen.14The importance of emerging

78、and developing markets Beyond the regions mentioned so far,there are several other emerging markets where investment is badly needed,and the opportunities are undeniable.However,much more needs to be done in these regions to attract large,long-term investors.In our survey,several emerging market reg

79、ions are only in focus for a minority,including South Asia(24 percent),Latin America(13 percent)and Sub-Saharan Africa(11 percent).From a climate change perspective,it is vital that more is invested in energy transition assets outside of developing countries,particularly as fossil fuel use is accele

80、rating in many emerging economies,far outpacing the growth of renewables.15Sustainable finance taxonomies are being developed globally to establish definitions for green and transition finance,helping to define sustainable activities.These taxonomies offer a framework for assessing the green credent

81、ials of companies,aiding in the fight against greenwashing and supporting new reporting requirements.Geri McMahon,Lead of Global ESG for Asset Management,KPMG International 13 World Energy Investment 2024,Middle East,IEA,June 202414 UAEs Clean Energy Investments Exceed$12 Billion,Aiming for 32 perce

82、nt Renewable Mix by 2030,ESG News,September 2024 15 2024 Statistical Review of World Energy,Energy Institute,June 202416 World Energy Investment 2024,IEA,June 202417 World Statistics Pocketbook 2024 edition,United Nations Department of Economic and Social Affairs,August 2024of all clean energy inves

83、tment occurs in emerging and developing countries(excluding China)16 despite these nations being home to about 67 percent of the worlds population.1715 percentThe regionsGlobally,only Energy transition investment outlook:2025 and beyond|16 2024 Copyright owned by one or more of the KPMG Internationa

84、l entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlook18 2024 Statistical Review of World Energy,Energy Institute,June 2024 19 2024 Statistical Review of World Energy,

85、Energy Institute,June 2024Investors who move early into emerging markets,with the right risk management strategies in place,stand to gain outsized rewards.These markets often offer first-mover advantages,and local governments are increasingly offering favorable conditions for investment.When the reg

86、ulatory framework is stable enough,and risks like currency fluctuation or supply chain disruptions are mitigated,investors can discover highly attractive opportunities relative to those in more saturated markets.Gavin Geminder Global Head of Private Equity KPMG InternationalThe next frontier:Big bar

87、riers,vast opportunities The financial investors we surveyed say that policy and market uncertainty are the main obstacles to considering energy transition assets in emerging markets.A lack of local infrastructure is another key problem.“When it comes to renewables,emerging markets are often quite f

88、ragmented,with underdeveloped or aging grid infrastructure,”says James Suglia,Global Head of Asset Management,KPMG International.“These barriers make it harder for variable energy sources to be adopted as easily as they are in more developed markets.”In 2023,Africa and South Asia accounted for less

89、than 10 percent of the worlds energy consumption.These regions contain many developing countries and large populations,many lacking access to reliable energy sources.Globally,one in ten people some 750 million do not have electricity in their homes.18 These regions will drive global energy demand fu

90、rther in the coming years as they continue to modernize,urbanize and industrialize.19The regionsEnergy transition investment outlook:2025 and beyond|17 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserve

91、d.IntroductionThe investmentsThe regionsThe barriersThe motivesThe policiesThe partnersThe outlookFossil fuelsDespite the shift toward sustainable assets,only 25 percent of investors have stopped making new investments in fossil fuels.The geopolitical conflicts in Ukraine and the Middle East have le

92、d to a renewed focus on energy security,highlighting the importance of oil and gas and leading to an increase in fossil fuel investments.Record-high global oil production and consumption were seen in 2023,20 and global investment in fossil fuel energy is expected to be over US$1.1 trillion in 2024.2

93、120 2024 Statistical Review of World Energy,Energy Institute,June 202421 World Energy Investment 2024,IEA,June 2024 Have energy transition investors stopped investing in fossil fuels?Fossil fuels3Energy transition investment outlook:2025 and beyond|18 2024 Copyright owned by one or more of the KPMG

94、International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsThe barriersThe motivesThe policiesThe partnersThe outlookAt the same time,higher interest rates,increased market volatility and various supply chain issues hav

95、e contributed to a downturn for renewable energy developers and operators.22 An orderly transition needs transitional fuelsHowever,the above shifts are unlikely to explain why only a quarter of investors have stopped investing in oil,gas,coal and related areas.The rate of renewables adoption can som

96、etimes obscure how reliant the world remains on fossil fuels,which currently account for 82 percent of the energy mix.23 Replacing the sheer volume of fossil fuel energy currently in the mix will be an enormous global challenge.“Were seeing renewed interest in transitional energy sources like natura

97、l gas,”says Wafa Jafri,Partner,Energy Strategy,KPMG UK.“These sources are crucial for helping to ensure energy security and affordability during the transition to fully renewable energy systems.Without investment in transitional fuels,we risk creating energy shortages or forcing developing economies

98、 to rely on even dirtier energy sources like coal.”We will need fossil fuels to support the transition because it is not simply a matter of replacing one source with another.22 2023:the year the European renewables bubble burst,Wood Mackenzie,January 2024 23 2024:Statistical Review of World Energy,E

99、nergy Institute,June 2024Fossil fuels61%of energy transition investors believe that geopolitics has slowed the rate of the energy transitionEnergy transition investment outlook:2025 and beyond|19 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provi

100、de no services to clients.All rights reserved.IntroductionThe investmentsThe regionsThe barriersThe motivesThe policiesThe partnersThe outlookThe energy transition is more like rebuilding a house than just changing the furniture.It involves enhancing or transforming the entire energy system supply,d

101、emand and everything in between.This includes adapting transmission lines,storage solutions and energy grids to handle the variability and distribution of renewable power.Its a revolution that will likely demand decades of investment and policy support.This reality has inspired some investors to inv

102、est in the more traditional energy businesses,as they understand the key role these organizations will need to play in the energy transition.“Theres value in engaging with them on their energy transition plans and understanding how they are looking at the risks and opportunities,”says Geri McMahon,L

103、ead of Global ESG for Asset Management,KPMG International.“By supporting them and monitoring their progress,investors can play a critical role in driving the energy transition.”What were seeing is an enhanced understanding of the scale of the energy transition and the need to invest in the capital-i

104、ntensive infrastructure that can help us decarbonize and transition energy sources.We need a phased transition that delivers the change we need while maintaining returns for businesses and investors.Elizabeth Ming Lead of Global Sustainability for Private Equity KPMG International Fossil fuelsEnergy

105、 transition investment outlook:2025 and beyond|20 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe

106、 outlookDifferent investor types have different reasons for investing in energy transition assets,and there are a wide range of investor types driving progress.These include governments,infrastructure funds,private equity groups,energy companies and energy-intensive businesses.Each has its own set o

107、f contexts,objectives and risk profiles.This research looks in particular at the evolving roles of two broad groups:financial investors(banks,asset managers,venture capital,private equity infrastructure funds,etc.)and operational investors(energy,utility,oil and gas and natural resources companies a

108、nd the automotive and transportation industries).These two groups are both diverse in themselves,but the division has a significant difference between them:operational investors are active users of the assets they invest in,whereas financial investors provide funding and expertise in pursuit of inve

109、stment returns.Why do investors choose energy transition assets?The motives4The motivesEnergy transition investment outlook:2025 and beyond|21 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Introdu

110、ctionThe investmentsThe regionsFossil fuelsThe barriersThe policiesThe partnersThe outlookFinancial investors prioritize risk-return factorsWe asked both groups for their top reasons for investing in energy transition assets.For financial investors,financial returns and portfolio diversification are

111、 the leading reasons.Regulatory compliance and risk management are also important factors.These are relatively universal drivers for financial investors,whatever themes or strategies they pursue.Operational investors emphasize different reasons,led by energy security and regulatory compliance,and fo

112、llowed by reputation,social impact,financial returns,technological development and environmental impact.Investments can demonstrate a commitment to sustainability Concern about corporate reputation is a notable point of difference between financial and operational investors.Operational investors pri

113、oritize reputation,but it is far less of a concern for financial investors,who put risk-return considerations first.This situation may change as regulators focus more on controlling greenwashing in financial services.24Operational investors have already experienced many years of increasing consumer

114、and stakeholder pressure to adopt sustainable practices,which has influenced their corporate investment strategies.25 Companies invest in clean energy projects not only for the potential returns or because it is the right thing to do for the planet;they do so to enhance their public image and comply

115、 with consumer expectations,which can be crucial to their market share.In turn,most CEOs(76 percent)now say they would be prepared to divest a profitable part of their business if it was damaging their reputation.2624 Avoiding the Greenwash Peril,KPMG,January 2023 25 How stakeholder alignment on sus

116、tainability unlocks a competitive advantage,World Economic Forum and Accenture,February 2022 26 KPMG 2024 CEO Outlook,KPMG,September 2024The motivesEnergy transition investment outlook:2025 and beyond|22 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entiti

117、es provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookTheres a growing realization among companies that the energy transition is not just a long-term issue but a near-term,operational reality.

118、These arent just aspirational goals set for 2050.Evolving policies and regulations,stakeholder expectations and present physical and transition risks all create immediate challenges that need to be addressed within the next few years.Elizabeth Ming Lead of Global Sustainability for Private Equity KP

119、MG InternationalFigure 4:Top reasons for investing in energy transition assets45%Financial returns39%Portfolio diversification31%Regulatory compliance30%Risk management28%Technological development28%Stakeholder pressure27%Environmental impact39%38%26%26%25%25%25%Energy independence or securityRegula

120、tory complianceReputation or brand positioningSocial impactFinancial returnsTechnological developmentEnvironmental impactFinancial investorsOperational investorsThe motivesEnergy transition investment outlook:2025 and beyond|23 2024 Copyright owned by one or more of the KPMG International entities.K

121、PMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookEnergy-intensive businesses are driving their own transformationsThe energy transition is forcing a revolution in

122、power generation,and it is also sparking radical change in several other sectors,including the manufacturing,automotive,steel,cement,oil and gas,chemicals and construction industries.Corporate investment in renewables and carbon reduction is expected to increase.For some large consumers,particularly

123、 in heavy industry or commercial buildings,on-site generation remains quite limited compared to their significant power demands.As a result,many of these businesses are likely to invest in greenfield renewable projects and sign power purchase agreements with renewable providers.Increasing numbers of

124、 customers and shareholders are considering whether businesses are decarbonizing their operations,products and supply chains.Sustainability issues now impact company valuations,adding to the business case for energy transition investments.27 In fact,72 percent of CEOs from energy,chemicals and natur

125、al resources companies say they have fully embedded environmental,social and governance(ESG)factors to create value in their businesses.28 Shareholders are also increasingly likely to assess the risk of investments based on their climate impact and rate of decarbonization,leading to the creation of

126、financial instruments such as green bonds,sustainability-linked loans and carbon credits.29 This,in turn,drives businesses to increase their decarbonization efforts.And investor demand for sustainable investments continues to grow,influencing further capital flows towards green assets.30 27 Building

127、 the business case for sustainability,World Business Council for Sustainable Development,July 202428 KPMG 2024 CEO Outlook,KPMG,September 202429 Navigating climate risks:3 strategies for building resilient financial institutions,World Economic Forum and auctus ESG,July 202430 KPMG global ESG survey:

128、ESG is becoming an impactful element in transactions,KPMG Law,July 2023 of CEOs from energy,chemicals and natural resources firms say they have fully embedded environmental,social,and governance(ESG)factors to create value in their business.2872 percentThe motivesEnergy transition investment outlook

129、:2025 and beyond|24 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe policiesThe partnersThe outlookThe motivesEnergy transition inve

130、stment outlook:2025 and beyond|24 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.Financial investorsOperational investorsSub-sectorsBanks,asset managers,venture capital,private equity,infrastructur

131、e funds Energy providers/utilities,oil and gas,natural resources,automotive,transportation Involvement with energy transition assetsInvest for the benefit of both clients and shareholders;typically providing debt and/or equity financeMore likely to own and operate the energy transition assets they p

132、urchase;typically use debt instruments to fund projectsValue of energy transition investmentsFinancial investors are responsible for larger amounts of capital per organization 30 percent have over US$1 billion under management,74 percent have over US$100 millionOperational investors have less invest

133、ed per organization 4 percent have over US$1 billion in energy transition assets,33 percent have over US$100 millionMain reasons for investing in energy transition assetsFinancial returns;portfolio diversificationEnergy independence(or security);regulatory complianceMost common strategies when inves

134、ting in energy transition assetsPublicprivate partnerships and private(or growth)equity investmentsPartnerships with financial investors and power purchase agreementsMost important partners or collaborators when investing in energy transition assetsEnergy companies and asset managementEnergy compani

135、es and consultantsTop three barriers to investing in energy transition assets1)Regulatory or policy risks2)Market volatility or uncertainty3)Technology performance uncertainty1)Regulatory or policy risks2)Technology performance uncertainty3)Market volatility or uncertaintyMost attractive areas for i

136、nvestment in energy transition assets over the next two years1)Energy efficiency(including electrification)2)Critical minerals and materials3)Transportation and related infrastructure4)Renewable and low-carbon energy1)Renewable and low-carbon energy2)Energy efficiency(including electrification)3)Tra

137、nsportation and related infrastructure4)Energy storage and grid infrastructureHow do financial investors differ from operational investors?Energy transition investment outlook:2025 and beyond|25 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provid

138、e no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe motivesThe policiesThe partnersThe outlookThe barriersInvestors who completed our survey say that policy or regulatory risks are the most significant obstacles to pursuing investments in energy transit

139、ion assets.Geopolitical and economic uncertainty have made investors more tentative in recent times,31 and survey respondents cite market volatility or uncertainty as the second biggest barrier to investment in energy transition assets.Like many barriers,the effects of volatility are unevenly distri

140、buted,but investors with a longer-term perspective are undeterred by shorter-term uncertainty,particularly when investing in a trend with such strong long-term momentum.What are the main barriers facing energy transition investors?The barriers536 Global inflation easing but high interest rates and p

141、olicy uncertainty take their toll on growth,KPMG,December 2023 Energy transition investment outlook:2025 and beyond|26 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe

142、regionsFossil fuelsThe motivesThe policiesThe partnersThe outlookFigure 5:Top five barriers to investment in energy transition assets Regulatory or policy risks40%Market volatility or uncertainty36%Technology performance uncertainty33%Operating costs19%Market competition19%Investors are looking for

143、greater certainty in government policy.They want stable and predictable policy environments so they can make informed decisions.Without clear guidance and support,it can be difficult to commit significant capital.Geri McMahon,Lead of Global ESG for Asset Management,KPMG InternationalThe barriersTech

144、nology performance uncertainty ranks as the third most significant barrier to investment in energy transition assets,with several factors contributing to this concern.Investors are often hesitant due to doubts about environmental patterns that influence the performance of renewables like wind and so

145、lar,as well as concerns about maintenance costs and how assets will integrate with broader energy networks.For new or emerging technologies,the challenges are more related to demonstrating long-term reliability and performance metrics,including efficiency,durability,and operational costs.Some barrie

146、rs are effectively risks that are difficult to manage,or too high for investments to remain viable.Investors require higher returns to compensate for higher risks,so barriers are sometimes passed through changes that increase projected revenue(such as subsidies)or reduce costs(such as lower equipmen

147、t prices).Energy transition investment outlook:2025 and beyond|27 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe partner

148、sThe outlookThe policiesThe majority we surveyed 64 percent say government policy is critical to the profitability of investments.This can take many forms,so what kinds of policy are most attractive to investors?The energy transition is a policy-driven trend.Supportive regulatory frameworks,such as

149、subsidies for renewable energy,carbon pricing,and mandates for clean energy usage,lower the risk and increase the attractiveness of investments in the energy transition.3232 Turning the tide in scaling renewables,KPMG,December 2023How do policy conditions impact energy transition investments?The pol

150、icies6Energy transition investment outlook:2025 and beyond|28 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe partnersThe

151、 outlook“One of the biggest drivers of recent activity in the energy transition space has been the policy and regulatory intervention we have seen in the UK,Europe,Asia and increasingly,all around the world,”says Geri McMahon,Lead of Global ESG for Asset Management,KPMG International.Policy evolves

152、as markets matureInvestors taking our survey say that feed-in tariffs(FITs)are the most important kind of policy driving investment in energy transition assets.FITs are popular with investors because they offer direct payment for electricity supply from renewable sources.Figure 6:Government policies

153、 deemed most important for driving investment into energy transition assets Feed-in tariffsRegulatory supportTax incentivesDirect investmentSubsidiesResearch and development grants43%35%34%31%28%26%The policies“Feed-in tariffs are clearly attractive because they provide long-term revenue guarantees

154、and contract certainty,especially for less mature technologies,”says Grant Hill,Managing Director,M&A,Climate&Decarbonization,KPMG UK.Energy transition investment outlook:2025 and beyond|29 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no

155、services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe partnersThe outlook“However,theres a movement towards more market-based mechanisms,which,if designed correctly,can stimulate development in these technologies at a lower cost than fee

156、d-in tariffs.”In comparison,governments have become less enthusiastic about FITs over the past decade,largely due to the risk of payments becoming unsustainable.33 Many countries now favor renewable energy auctions,which are seen as more competitive and cost-effective.Auctions can drive down prices

157、by fostering competition among developers,who bid on the price at which they will sell electricity.Governments can offer investors security(through contracts for difference or power purchase agreements)but retain more control over the pace and scale of renewable energy development.3433 Renewable ene

158、rgy:are feed-in-tariffs going out of style,Power Technology,January 201734 Renewable energy auctions:status and trends beyond price,IRENA,December 2019The policiesThis has been a key element of policies like the Inflation Reduction Act and more recently,the Border Adjustment Mechanism in Europe.The

159、focus isnt just on energy investment but also on building up the supply chain necessary to support that investment.Wafa Jafri Partner,Energy Strategy KPMG UKPolicy conditions are expected to improve in most regionsPolicy conditions for investment in energy transition assets are expected to improve i

160、n China,the US and Europe over the next two years.India,Japan and(especially)Australia are more pessimistic.A major driver of confidence in policy frameworks is how comprehensive they are.Policies that are too narrow in their applications and scope risk driving interest in one part of a value chain

161、while leaving vital elements unsupported.Another important consideration is whether policymakers can respond quickly to market needs.Investors we surveyed are divided on whether energy transitionrelated government policy can adapt quickly enough to meet market needs.This suggests that governments co

162、uld do more in this area.Energy transition investment outlook:2025 and beyond|30 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe mot

163、ivesThe partnersThe outlookRegulating the next phase of the transitionMajor regulatory changes concerning ESG reporting will likely significantly impact companies and investors in the coming years.New ESG reporting standards are coming into effect.International and EU standards are already in place

164、for the 2024 fiscal year,with the planned US climate-related disclosure rules delayed by a judicial review.35 Companies will need to report on how climate risks impact their businesses and how theyre managing these risks.This demands a robust evaluation of their progress and an understanding of the

165、long-term financial impact of climate and sustainability issues.Figure 7:Most say that government policy is critical to profitability of investments in energy transition assets(Percentages show the sum of“agree”and“strongly agree”responses to the statement.)35 Comparing sustainability reporting requ

166、irements,KPMG,March 2024 The policies believe a carbon tax increases a region/countrys attractiveness for investments in energy transition assets.64%The transparency that will come from reporting regulations can enhance market understanding of how companies are managing climate and transition risk a

167、nd the correlations to long-term value.Investors should be equipped to make more informed decisions and stakeholders may adjust their expectations based on this new information.Elizabeth Ming,Lead of Global Sustainability for Private Equity,KPMG InternationalGovernment policy is critical to the prof

168、itability of investments in energy transition assetsGovernment policy related to the energy transition creates unnecessary complications or risksGovernment policy related to the energy transition is too slow to adapt to market needs64%54%55%Energy transition investment outlook:2025 and beyond|31 202

169、4 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe outlookFinancial and operational investors pursue different stra

170、tegies when investing in energy transition assets.Financial investors use a wide range of strategies,the most popular being public-private partnerships(PPPs),private equity and infrastructure funds.Operational investors usually rely on partnerships with financial investors,but powerpurchase agreemen

171、ts,green bonds,sustainability-linked loans,and PPPs are also popular.There is also an important strategic difference within the financial investor group.Pension funds(and other funds with similar responsibilities)are typically longer-term investors.This is true even though pension funds can and do i

172、nvest in private equity,venture capital,infrastructure funds and other specialized funds.While this gives them access to potentially higher-growth assets,it is typically done with limited allocations from broadly diversified portfolios,with risk controls designed to balance security and long-term gr

173、owth.What role do partnerships play in energy transition investments?The partners7The partnersEnergy transition investment outlook:2025 and beyond|32 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.

174、IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe outlookThe partnersInvestors seek partners to share risk,gain influence,and access skills As we touched on in the last section,the energy transition and the new energy industry that is emerging extends beyond tr

175、aditional energy sectors such as oil,gas,and power generation,to encompass a wide range of industries.This shift involves not just the production of energy,but also its consumption and the infrastructures and technologies that support both.Private equity funds have shorter holding periods,while pens

176、ion funds are more focused on long-term value creation.A long-term perspective is important in the context of energy transition investments,where the returns may take years to materialize.Geri McMahon,Lead of Global ESG forAssetManagement,KPMG InternationalFigure 8:The most important partners/collab

177、orators in energy transition investments39%39%36%34%31%28%26%22%21%19%14%14%6%Financial investorsOperational investorsEnergy companiesAsset managementConsultantsVenture capital or private equityTechnology providersInvestment banksHeavy industryCorporate or private banksInfrastructure or pension fund

178、sDevelopersGovernmentSovereign wealth funds34%32%30%25%21%14%Energy companiesConsultantsFinancial institutionsTechnology providersHeavy industryDevelopersGovernmentEnergy transition investment outlook:2025 and beyond|33 2024 Copyright owned by one or more of the KPMG International entities.KPMG Inte

179、rnational entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe outlookThe supply chain for wind and solar has historically been very fragmented,often consisting of small,country-specific businesses.Were n

180、ow seeing investors interested in consolidating and growing these businesses to create more efficient,international supply chains.Grant Hill Managing Director,M&A,Climate&Decarbonization KPMG UKThe partnersThis is leading to many new relationships and projects that unite organizations that have neve

181、r previously had cause to collaborate.In our survey,energy companies are seen as the most important partners for most investors(of all types),followed by consultants,financial organizations and technology providers.What do investors want from their partners?Almost all the respondents to our survey 9

182、4percent on average prioritize finding partners to help with three things:to share the risk of energy transition investments,to add the right skills or experience,and to bring relationships or influence needed for success.The energy transition is a horizontal investment theme,not just a vertical one

183、 itsnot limited to the energy and natural resources sectors.Private equity funds,for example,are now looking across multiple traditional verticals to make this energy transition system work,including industrials,business services,consultancies,and tech businesses,in addition to the classic grid and

184、power generation sectors.Grant Hill,Managing Director,M&A,Climate&Decarbonization,KPMG UKprioritize finding partners to share the risk of energy transition investments.94 percentEnergy transition investment outlook:2025 and beyond|34 2024 Copyright owned by one or more of the KPMG International enti

185、ties.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookBut it is estimated that we need to invest almost three times as much each year in the second half of this d

186、ecade to meet Paris Agreement targets.37While it will surely take longer than we would like to reach those levels,there are still reasons to expect a rapid expansion in energy transition investment over the next few years.Investment in energy transition assets has accelerated significantly since 202

187、0,rising from about US$1.2 trillion in2020 to over US$2 trillion in 2024.3636 World Energy Investment 2024,IEA,June 202437 Energy Transition Investment Trends 2024,Bloomberg New Energy Finance,January 2024What do energy transition investors expect from the next two years?The outlook8The outlookEnerg

188、y transition investment outlook:2025 and beyond|35 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersTh

189、e outlookEasing interest rate and supply challengesIn recent years,higher financing costs have slowed many energy transition investments.Ashift in interest rates or inflation can significantly affect the economics of a project,making it more challenging to move forward.Inthe US,many off-take agreeme

190、nts previously agreed upon at the state level became unviable due to changes in interest rates.However,as global inflation falls back from its recent highs,central banks worldwide are now lowering(or are expected to lower)their interest rates.38 There is a good chance that merger and acquisition act

191、ivity will continue to increase as financial conditions improve and withheld capital isinvested.3938 Inflation and interest rates tracker:see how your country compares,Financial Times,October 202439 Geopolitical uncertainty slowing growth,but GDP rebound forecast for 2025,KPMG,June 2024The current m

192、arket conditions demand careful monitoring of interest rate signals and macroeconomic indicators.Savvy investors are active,strategic players who anticipate shifts,understand the broader economic canvas,and act swiftly to secure investments that promise robust returns in a dynamic rate environment.A

193、drian Scholtz Partner,Lead of Global Energy Deals KPMG InternationalThe outlookEnergy transition investment outlook:2025 and beyond|36 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe

194、 investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersFigure 9:The most attractive areas for investment in the next two yearsEnergy efficiency(including electrification)Renewable and low-carbon energyTransport and related infrastructureCritical minerals and materialsEnerg

195、y storage and grid infrastructureCarbon capture,utilization and storageFossil fuels with offsets/decarbonization36%34%32%29%28%20%16%40 Goldman says the bear market for battery metal prices is far from over,CNBC,March 202441 Global glut turns solar panels into garden fencing option,Financial Times,A

196、pril 2024Recent supply chain issues have also eased,leading to reduced materials prices.The cost of key battery metals(lithium,cobalt and nickel)has fallen sharply over the past year,with further decreases expected.40The cost of solar panels is now lower than ever before.In fact,photovoltaics are so

197、 affordable that citizens in the Netherlands and Germany have started using them to construct garden fences(despite the sub-optimal angle to the sun).41Efficiency,renewables and transport are all expected to be attractiveOperational investors expect renewables to be themost attractive energy transit

198、ion investment in the next two years,followed by energy efficiency and transportation.Financial investors are less enthusiastic about renewables over the next two years,ranking them as the fourth most attractive asset type in this regard,after energy efficiency,critical minerals and materials,and tr

199、ansportation.The outlookEnergy transition investment outlook:2025 and beyond|37 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe moti

200、vesThe policiesThe partnersThe outlookFigure 10:Investors are divided on whether volatility and elections make it more or less likely that their organization will invest in energy transition assets14%38%26%22%19%22%35%24%Market volatilityRecent or upcoming electionsMuch less likelyLess likelyMore li

201、kelyMuch more likely42 Electricity Grids and Secure Energy Transitions,IEA,October 202343 Renewable capacity highlights,IRENA,March 202444 World Energy Investment 2024,IEA,June 202445 Geopolitical uncertainty slowing growth,but GDP rebound forecast for 2025,KPMG,June 2024One of the reasons for this

202、could be grid capacity and integration challenges,issues that slow the addition of renewable energy generators in many regions.Currently,renewable power projects totaling at least 3,000 gigawatts are stuck in grid connection queues around the world42 that is more than twice the worldwide capacity of

203、 all the solar power currently in use.43 A major concern is the grids ability to accommodate the growing addition of renewable energy.While the production of renewable energy is well understood,the challenge lies in efficiently transporting it to the right place at the right time.To keep pace with t

204、he expanding renewable capacity,it is important to address gridmanagement and storage bottlenecks.There are signs that things are starting to change.After remaining at around US$300 billion annually since 2015,investment in power grid capacity and technologies is projected to reach US$400 billion in

205、 2024.This increase is fueled by new policies and investments across Europe,the US and China,as well as in certain regions in Latin America.44 Threats for some can be opportunities for othersRecent years have shown how even the most careful planning can be upended by shocks andsurprises.This has lef

206、t a lingering uncertainty,especially around the influence of geopolitics.Ongoing political changes could lead to more inward-looking and protectionist economic policies.45 The outlookEnergy transition investment outlook:2025 and beyond|38 2024 Copyright owned by one or more of the KPMG International

207、 entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookPolitical elections and shifts in market volatility can both challenge and energize,depending on your c

208、ontext,goals,and point of view.Each election brings potential shifts in policy that can impact investment conditions,while market fluctuations can create new investment opportunities or expose risks.Navigating these changes requires a sharp focus on adapting investment strategies to capitalize on em

209、erging opportunities.James Suglia Global Head of Asset Management KPMG InternationalDriving the next phase of the transitionSeveral aspects of the energy transition megatrend will continue to support the case for investments in related assets.Over the next two years,our survey finds that investors e

210、xpect four types of organization to be the most active in funding,developing and acquiring energy transition projects:integrated energy companies(including oil and gas),energy-intensive businesses,venture capital/private equity firms,and infrastructure funds.This diverse selection reflects the new l

211、andscape of energy investing,where governments create policy frameworks to encourage collaboration among energy producers,consumers,and investors,to collectively advance the next phase of the energy transition.The pace of technological progress in solar,wind,storage,and electric vehicles has been re

212、markable.Efficiency continues to improve,costs are steadily decreasing,and the supply chain is strengthening.Despite ongoing geopolitical shifts,the impact on renewable investments may be limited.The technological advancements made over the past decades are now delivering results,and that momentum i

213、s difficult to slow down.We asked our survey respondents whether certain factors made them more or less likely to invest in energy transition assets.About half(52 percent)say that market volatility makes them less likely to invest,with 41 percent having a similar response to the effect of recent and

214、 upcoming elections.Just under half(48 percent)are more likely to invest in response to market volatility,and 59percent expect that recent or upcoming elections will encourage them to invest.The outlookEnergy transition investment outlook:2025 and beyond|39 2024 Copyright owned by one or more of the

215、 KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersFigure 11:Groups expected to be most active in funding,developing and acquiring energy transiti

216、on projects over the next two yearsIntegrated energy companies(including oil and gas)Energy-intensive businessesVenture capital and private equity firmsInfrastructure fundsUtilities and grid operatorsGreen developers and independent power producersGovernment and public agencies37%34%32%31%24%21%19%D

217、espite the challenges,a strong wall of capital remains ready for deployment,with the investment community now pursuing quality investments with renewed vigor and discernment.Investors are increasingly aware of the risks and are learning to be more strategic,reflecting on both the successes and chall

218、enges of their past investments.Adrian Scholtz Partner,Lead of Global Energy Deals KPMG InternationalThe outlookEnergy transition investment outlook:2025 and beyond|40 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.Al

219、l rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookKey takeaways for Strategic investment in the energy transitionEnergy transition investment outlook:2025 and beyond|41 2024 Copyright owned by one or more of the KPMG Interna

220、tional entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookThere are significant opportunities beyond traditional asset-heavy power generation and emerging

221、technologies for investors seeking to benefit from the strong sector tailwinds across the energy transition.Investments across the broader supply chain(including business services,manufacturing,software and advisory companies)are crucial to the energy transition and benefit from the same favorable m

222、acro trends.For private equity managers with existing portfolios,the ideal time to explore how portfolio companies can pivot or extend their products and services into the energy transition value chains is early in the holding period.This can significantly enhance exit values.KPMG professionals can

223、help investors identify opportunities across energy transition value chains and can conduct portfolio reviews to assess how existing investors may participate in the energy transition.Our survey clearly shows that government policy is a key consideration for investors in energy transition.This goes

224、beyond short-term stimulus packages;government policies need to be resilient and stable enough to give investors the confidence necessary for long-term investments.Operational investors typically have long-term holding strategies,while financial investors need to assess policy durability to ensure t

225、hat their potential future buyers will be comfortable with todays long-term forecasts when the time comes to exit.A government policy review should be comprehensive,considering both subsidies and financial support.Not only that,but it should also encompass the governments commitment to building supp

226、ly chains and ensuring the availability of skilled labor,among other key factors.KPMG regulatory specialists,who are spread across the global organization of firms,offer guidance on the short-and long-term impacts of government policy.Explore the full range of opportunitiesAssess government policyEn

227、ergy transition investment outlook:2025 and beyond|42 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partner

228、sThe outlookFinancial and operational investors recognize that partnerships are crucial to helping reduce risk in long-term capital deployment,especially in uncertain regulatory environments.Some partners will enter secured off-take agreements,such as gas and power purchase agreements,which help to

229、unlock project financing.There are also compelling partnership opportunities available via centralized or specialized development areas.These include the US Regional Clean Hydrogen Hubs and the European Hydrogen Backbone initiative.Understanding different partnership structures and examples already

230、in action can help turn ideas into viable projects.KPMG professionals provides advice on partnership structuring and can facilitate introductions to potential partners through our the global organization of firms.While East Asia,Europe and North America dominate the geographic focus on energy transi

231、tion investments,there may be significant advantages for investors willing to target emerging markets,as these can offer potentially outsized returns.KPMG firms global decarbonization team,working alongside our local teams with their on-the-ground experience,can help investors understand the real ri

232、sks and opportunities in these markets.This knowledge can help reduce the cost of capital and can lead to strong economic returns.Seek partners to add value and help reduce riskTake a global viewEnergy transition investment outlook:2025 and beyond|43 2024 Copyright owned by one or more of the KPMG I

233、nternational entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookThe energy transition is one of the biggest,longest and most important investment megatrend

234、s in history.Global commitments to 2030 targets suggest that investors can look forward to many near-term opportunities.To turn the COP28 pledge into reality tripling renewable energy capacity and doubling the rate of energy efficiency improvements by 203046 will involve significant investment.It is

235、 estimated that investment in renewable power generation,grids,and storage will need to rise from US$1.2 trillion in 2024 to US$2.4 trillion in 2030,while spending on efficiency and electrification,needs to increase from US$669 billion in 2024 to US$1.9 trillion in 2030.47ConclusionTaken together,th

236、ats an increase of about US$2.4 trillion,which puts significant responsibility in the hands of investors of all kinds and demands we find quick and effective ways to collaborate and overcome barriers.In this report,we have seen how energy transition investing is eroding the traditional boundaries of

237、 the energy industry and introducing new actors,relationships and competitors.Many of todays energy-intensive businesses far from passively purchasing energy are taking control of their energy transition pathway and developing their own assets for their own needs.Many financial investors far from pa

238、ssively providing capital are actively orchestrating the development of assets and infrastructure to create new energy value chains.The actors,challenges,policies,and economics of the transition are expected to continue to evolve,but at a macro level,there is strong,consistent momentum behind the te

239、chnologies,policies and supply chains driving the transition.46 Global Renewables and Energy Efficiency Pledge,COP28 UAE declaration,November 202347 World Energy Investment 2024,IEA,June 2024Energy transition investment outlook:2025 and beyond|44 2024 Copyright owned by one or more of the KPMG Inter

240、national entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookHow KPMG can helpKPMGs Energy Transition Deal Advisory practice provides wide-ranging support t

241、o investors navigating the rapidly evolving energy transition landscape.We help clients deploy capital effectively in both established and emerging markets.Effectiveness starts with identifying the right investment opportunities,and KPMG leverages a global organization of industry,regulatory and fin

242、ancial specialists to help identify strategic opportunities across the value chain.Such opportunities range from infrastructure projects to asset-light business models,supply chain investments and emerging technologies.Once the appropriate opportunity set is identified,KPMG provides a holistic suite

243、 of buy-side advice across the deal lifecycle,from pre-deal strategy and value creation thesis-building to in-deal due diligence and post-deal transformation.Our global government policy and regulatory teams help investors assess the resilience of government policies,navigate subsidy regimes and eva

244、luate key business factors,such as local labor and supply chains.All of these are critical to de-risking long-term investments.KPMG also has the experience needed to guide investors who are forming the strategic partnerships that are often essential to reducing risk in uncertain regulatory environme

245、nts.By leveraging tools such as secured off-take agreements and new partnership models,investors are better able to unlock their capital,access specialized knowledge and help ensure project viability.KPMG has long-standing,in-depth experience in emerging markets.The combination of the global organiz

246、ation of firms and local understanding helps investors seize first-mover advantages and tap into high-growth opportunities.By providing clear insights into risks and rewards,KPMG professionals equips investors to make informed decisions wherever they choose to invest.We also serve private equity man

247、agers with existing portfolios,working collaboratively with you and your portfolio company management teams to identify opportunities to help increase your exposure to energy transition end-markets and the huge sector tailwind behind these.In this way,we help you to drive value creation ahead of exi

248、t.Energy transition investment outlook:2025 and beyond|45 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe par

249、tnersThe outlookAccoladesThe energy transition stands as the defining challenge of our era,compelling various sectors to navigate the complexities of powering human progress in a manner that is not only reliable and affordable but also sustainable and equitable.KPMG firms are uniquely positioned to

250、guide businesses through this intricate landscape,leveraging the experience of over 1,500 professionals across more than 50 global hubs.Our energy professionals work closely with institutions and companies to help them understand the dynamics of energy transition,identify growth opportunities,and de

251、velop and execute strategic plans.KPMG professionals credibility in this space is underscored by our thorough approach,which synthesizes insights from a diverse range of stakeholders including investors,managers,regulators,and service providers.This multifaceted perspective enables us to assist clie

252、nts in making informed decisions that help propel their businesses forward,even amidst uncertainty.With a tailored suite of services and tools,KPMG empowers clients to formulate and implement leading strategies for navigating the energy transition effectively.KPMG named a Leader in Climate Change Co

253、nsulting by VerdantixKPMG was recognized as a global Leader in Climate Change Consulting by Verdantix in their report entitled Verdantix Green Quadrant:Climate Change Consulting 2023.The report provides a detailed,fact-based benchmark of 15 of the most prominent climate change consulting providers i

254、n the market to identify those who“demonstrated the most comprehensive climate change consulting capabilities.48 48 Verdantix Green Quadrant:Climate Change Consulting 2023Energy transition investment outlook:2025 and beyond|46 2024 Copyright owned by one or more of the KPMG International entities.KP

255、MG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookKPMG named a Leader in ESG Program Management Services by the IDC MarketScapeKPMG has been recognized as a worldwid

256、e Leader in ESG Program Management Services in the IDC MarketScape:Worldwide ESG Program Management Services 20232024 Vendor Assessment.The report evaluates the vendor performance of 11 environmental,social,and governance(ESG)program management services providers worldwide.49KPMG named a global Lead

257、er in ESG Environmental Services by ALM IntelligenceKPMG was recognized as a global Leader in ESG by ALM Intelligence in their report entitled ALM Pacesetter:ESG:Environmental 2023-24 and received the top overall score of all firms profiled.The report explores how the most innovative professional se

258、rvices providers in 2023 are helping clients understand,develop,and properly manage environmental factors as part of their business strategy as well as how innovative providers themselves are developing an environmental focused approach that is aligned to meet their own ESG organizational goals.5049

259、 IDC MarketScape:IDC MarketScape:Worldwide ESG Program Management Services 2023-2024 Vendor Assessment.”,December 2023,IDC#US5060842350 ALM Intelligence,ALM Pacesetter:ESG:Environmental 2023-24 report(c)2023;used with license permissionsEnergy transition investment outlook:2025 and beyond|47 2024 Co

260、pyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookAbout the ResearchThe Energy transition investmen

261、t outlook is supported by primary and secondary research.The primary sources comprise a survey of 1,400 senior executives from around the world,together with in-depth interviews with subject matter experts and leaders.Secondary sources are referenced via footnotes throughout the report.The survey wa

262、s fielded in July and August of 2024.The survey sample profile is shown in the tables below.CountriesAustralia100Ireland50Canada100Italy50China100Korea50France100Mexico50Germany100Netherlands50Japan100Saudi Arabia50UK100Singapore50US100Spain50Brazil50Switzerland50India50Africa*50*17 countries are re

263、presented,led by SouthAfrica(15)IndustriesCorporate or private bank142Asset management or pension fund188Investment bank206Venture capital,private equity66Infrastructure fund68Energy or utility210Oil and gas210Natural resources210Automotive and transportation100SizeLess than 100 employees280100999 e

264、mployees5601,0009,999 employees42010,000+employees140SeniorityC-suite executive(or equivalent)560Direct report to a C-suite executive468Manager reports direct to C-suite372Total number of respondents:1,400InvolvementResponsible for investment decisions relating to energy transition assets409Analyst,

265、advisor or committee member involved in investment decisions relating to energy transition assets332Subject matter expert consulted on aspects of investment decisions relating to energy transition assets211Has a role that is primarily focused on evaluating and investing in energy transition assets17

266、9Is required to have a detailed understanding of investment decisions relating to energy transition assets269Energy transition investment outlook:2025 and beyond|48 2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All r

267、ights reserved.IntroductionThe investmentsThe regionsFossil fuelsThe barriersThe motivesThe policiesThe partnersThe outlookAcknowledgementsWe would like to thank our panel of senior subject matter professionals for their time and insights.Adam Hamilton Director,Energy and Natural Resources KPMG UKMi

268、ke Hayes Climate,Decarbonization and Nature Leader Global Head of Renewable Energy KPMG International Gavin Geminder Global Head of Private Equity KPMG InternationalWafa Jafri Partner,Energy Strategy KPMG UKAdrian Scholtz Partner,Lead of Global Energy Deals KPMG International Kishlay Sinha Director,

269、Energy Corporate Finance KPMG UKJames Suglia Global Head of Asset Management KPMG International Thanks to our KPMG International teams for making this possible:Erin DoddsLyndie DragomirNicole DukeEvalueserveLindsey KeckJessica LoSchiavoMarsha ToomeyThe information contained herein is of a general na

270、ture and is not intended to address the circumstances of any particular individual or entity.Although we endeavor to provide accurate and timely information,there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future

271、.No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.Throughout this document,“we”,“KPMG”,“us”and“our”refers to the global organization or to one or more of the member firms of KPMG International Limited(“KPMG Interna

272、tional”),each of which is a separate legal entity.2024 Copyright owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.KPMG refers to the global organization or to one or more of the member firms of KPMG International L

273、imited(“KPMG International”),each of which is a separate legal entity.KPMG International Limited is a private English company limited by guarantee and does not provide services to clients.For more detail about our structure please visit KPMG name and logo are trademarks used under license by the ind

274、ependent member firms of the KPMG global organization.Designed by Evalueserve|Publication name:Energy transition investment outlook:2025 and beyond|Publication number:139713-G|Publication date:November ContactsGavin Geminder Global Head of Private Equity KPMG International E:Mike Hayes Climate,Decar

275、bonization and Nature Leader,Global Head of Renewable Energy,KPMG International E:mike.hayeskpmg.ieGrant Hill Managing Director,M&A,Climate&Decarbonization,KPMG UK E:grant.hillkpmg.co.uk Elizabeth Ming Lead of Global Sustainability for Private Equity KPMG International E: Geri McMahon Lead of Global ESG for Asset Management KPMG International E:.auAdrian Scholtz Partner,Lead of Global Energy Deals KPMG International E:adrian.scholtzkpmg.co.ukDaisy Shen Head of Climate and Sustainability KPMG China E:James Suglia Global Head of Asset Management KPMG International E: