The energy transition – the world’s efforts to replace fossil fuels with low carbon energy sources – is well underway, catalysed by declining costs of renewables and broad political and regulatory support.
Despite the tailwinds renewables are enjoying today, we believe 2050 net-zero goals are largely unrealistic, given grid reliability and structural supply chain challenges. This delayed energy transition will result in a long, useful life for conventional generation. ESG scores decline globally for second year in a row Specifically, we believe natural gas will remain critically important for home heating and power generation. In essence, the market is understating the cash flow durability of traditional generation. Investors must therefore strike a delicate balance between inves...
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