Winning the renewables race is all about location, according to Richard Lum, Co-CIO at Victory Hill Capital Partners.
The transition to a low-carbon economy is creating a once-in-a-generation dislocation in energy markets, fundamentally bringing the longevity of current energy infrastructure into question. For example, whereas energy systems designed for oil, coal and gas were predicated on centralised power generation, there is now a burgeoning need to upgrade or reform power grids to a distributed model, accommodating the growth of renewable energy sources as we progress towards net zero goals.
This gap between legacy energy infrastructure and a sustainable, low-carbon future provides an opportunity for astute investors. But capitalising upon uncertainties like supply security and price volatility at peak times is not as simple as swapping every coal-powered energy plant for a wind farm. Globally, the energy transition is taking place at varying speeds in different locations, leading to profound differences in how renewables assets perform.