The shift away from hydrocarbons and towards renewable and low-carbon technologies is not only changing the way we power our lives, but also offers a wealth of investment opportunities for those who can decipher the complex landscape. Traditional institutional investors looking to gain a competitive edge in this sector need a single source of truth to inform on market trends and new technologies to make the best long-term investments. In this blog, our Enverus Intelligence® Research (EIR) team delves into the winners and losers of the energy transition, shedding light on key insights that can guide your investment decisions.
(Winner) Regulated utilities and IPPS: The vanguard of the energy transition
Regulated utilities and independent power producers (IPPs) stand out as primary drivers of energy transition technologies, specifically as they work to increase their low-carbon power generation. These sectors provide the most exposure to a diverse array of renewable energy technologies due to the increased demand for clean power generation. While they have experienced some challenges, with only 2-3% sector revenue year-over-year (Y/Y) growth, their long-term potential remains robust as power demand expectations keep growing.
(Loser) Supply Chain and Regulatory Challenges in Renewable Technologies
While renewable energy technologies, including wind and solar manufacturers, have faced headwinds with a more significant 10% M/M decline, the root causes are clear. Supply chain challenges and regulatory uncertainties have hampered their growth. Geopolitical tensions – especially with China, a crucial manufacturing partner in renewables –add to the uncertainty. However, these challenges may be temporary, making it a sector to watch closely.
(Winner) Lithium: A key player in the energy transition
Lithium, a critical component in energy storage, has experienced a 10% quarter-over-quarter and a 56% Y/Y price drop to settle at a more sustainable level after supply increases eased imminent shortage concerns. Direct lithium extraction (DLE) is an energy transition technology that extracts lithium from produced water in oil and gas wells, therefore companies well positioned to capitalize on lithium’s role in the transition stand to benefit from both strong oil and lithium prices, making it a potentially attractive investment avenue. For more details check out our blog, “Securing domestic supply of lithium.“
(Tie) Energy security concerns: Large-caps and majors locking up inventory and strategic energy transition assets
While ExxonMobil’s recent acquisition of Pioneer ensures a longer inventory runway, the company’s acquisition of Denbury for their strategic CCUS assets also signals a clear message on how they are thinking about their role as an energy company through the energy transition. Companies are strategically locking up energy transition assets today to secure their place as an energy company over the next ten years. This heightened focus on energy security could create opportunities for savvy investors who can identify companies with robust strategies in this regard.
(Winner) CCUS: A growing sector with enormous potential
Carbon capture, utilization, and storage (CCUS) is a sector that has exhibited impressive Y/Y growth. The significant increase in research and development, investment and exponential revenue growth in this area makes it an exciting prospect for investors. As the world seeks to reduce carbon emissions, CCUS technology will play a pivotal role, and those invested early could reap substantial rewards. Be sure to watch our recent webinar, “Potentials and Challenges to Executing CCUS at Scale” and hear how current executives at the front lines of the CCUS movement are meeting the demands of challenges faced.
Why choose Enverus for in-depth research:
In this dynamic landscape of the energy transition, it is crucial to stay well informed to guide investment decisions. Enverus provides comprehensive energy transition solutions at every step:
- Single source of truth within the energy transition: Enverus offers unbiased data and analytics to help you stay ahead of the curve and make informed investment decisions.
- Expertise: Our EIR team is composed of energy experts across the industry to provide a comprehensive view from all levels of the industry.
- Most coverage of renewable assets and companies: We cover 54,000+ renewable assets and companies, 150,000+ EV charging stations, 1,100+ generators and 9,300+ power constraints.
- Customized reports: Tailored reports and analysis help you focus on the specific areas of the energy transition that align with your investment goals.
The energy transition is reshaping the energy landscape and providing unique investment opportunities for those who can navigate its complexities. As the distinctions between winners and losers become more evident, Enverus stands ready to be a reliable partner in your quest for valuable insights and research to empower your journey. Regulated utilities, lithium, energy security and CCUS are just a few examples of the avenues worth exploring, and Enverus can help you make the most of these opportunities.
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*About Enverus Intelligence®| Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. See additional disclosures here.