Energy Transition

Energy transition is the shift from fossil fuels towards a lower-carbon energy system. It includes renewable electricity generation, the electrification of transport and other sectors, and the infrastructure needed to support these changes.

Rising electricity demand, decarbonisation and the need for energy security and resilient infrastructure are driving substantial investment requirements across generation, storage, energy efficiency and electrification. Private capital plays an important role in financing this transformation. Opportunities arise where established technologies, supportive market frameworks and robust business models translate these structural needs into commercially viable projects.

The opportunity extends well beyond renewable electricity generation. Battery energy storage systems (BESS) provide flexibility that supports renewable energy integration and grid stability. Electrification enables electricity to replace fossil fuels in transport, heating and industrial applications, while energy efficiency measures reduce the energy needed to deliver the same services.

The broader path to net zero also includes decarbonising hard-to-abate sectors and addressing residual emissions through carbon capture and storage and carbon removal technologies such as direct air capture. Technology maturity and commercial viability vary across these applications, many of which require further development or deployment at scale. These areas are currently outside our active investment focus.

According to BloombergNEF, global energy transition investment reached a record $2.3 trillion in 2025, an increase of approximately 8% on 2024. Investment grew at a compound annual rate of approximately 19% between 2020 and 2025. These figures cover a broad range of sectors, including renewable energy, storage, power grids and electrified transport, and illustrate the scale of capital being deployed across the transition.

Energy transition investments can offer long-term income, capital growth and diversification through exposure to physical infrastructure. Some revenues may be contracted or linked to inflation, although these characteristics vary by asset and investment strategy.

There is no single right allocation. It depends on an investor’s objectives, investment horizon, liquidity needs and wider portfolio. Renewable generation and battery storage have different risk and return characteristics, making the mix of assets an important consideration.

Our analysis suggests a dedicated battery storage allocation can offer a return driver that differs fundamentally from renewable generation, earning from volatility, scarcity and flexibility rather than output, providing a broader opportunity set for allocators seeking this as a distinct exposure.

Wind is the UK’s most established renewable technology by electricity generated, accounting for around 29.5% of annual supply, with the country’s plentiful wind resource making many projects economically viable without government subsidy. Solar is also well established, contributing around 5.2% of annual supply, with its biggest impact during the summer months.

As renewable generation grows, battery storage is essential for balancing supply and demand across the electricity grid. The UK currently has approximately 7.6GW of installed battery storage capacity, but significant additional capacity will be needed to keep pace with the growing share of renewables in the energy mix.

Risks include changes in electricity prices, regulation and policy, alongside construction, operational and technology risks. Returns also depend on how revenues are generated and contracted, making asset selection and active management important.