Whitepaper: How the energy transition is shaping infrastructure needs in the US

The energy sector is at the precipice of the transition to a low carbon economy.

The energy transition is about transforming the energy sector from one that is fossil-fuel based to one that is carbon-neutral by 2050 to help achieve the goals of the Paris Agreement. In anticipation of, or in reaction to this shift, regulated US utilities companies are rapidly developing strategies centred around long-term decarbonisation goals with many targeting “net zero” emissions by 2050.

The scale of the investments needed to achieve net zero emissions by 2050 cannot be underestimated. On the Global Listed Infrastructure team, we believe regulated electric utilities are well-placed to benefit from the energy transition, as low carbon solutions and technology – coupled with changing regulations, policy, and consumer demands – pave the way for long-term investment opportunities. The key challenge will be managing the energy transition whilst balancing competing factors of reliability, security, and affordability of energy together with sustainability.

The paper outlines:

• The roadmap ahead for significant investment in renewables, transmission and distribution (T&D) infrastructure, electrification, and low carbon solutions.
• How regulated electric utilities stand to capture a substantial portion of these opportunities and deliver multi-decade growth in stable and transparent returns.
• The benefits of accessing renewable investment opportunities through regulated electric utilities relative to other renewable investments, such as commercial renewable developers and “yieldcos”.
• The extent to which the low carbon transition and ongoing electrification is hampering the long-term outlook for natural gas and long-term valuations.
• The opportunities and hurdles for the gas network to be complemented and/or re-purposed for renewable natural gas and green hydrogen.
• How the team’s research translates into portfolio positioning.

Authors:

• Andrew Maple-Brown, Co-founder & Managing Director
• Georgia Hall, ESG Analyst
• Kevin Liu, Senior Research Associate
• Amelia Campbell, Research Associate