Compared to the REPowerEU’s target, this would leave extra capacity for the planned retirement of coal power capacities and growth in electricity demand.
In our scenario, the renewable energy and battery storage capacities will substitute approximately one third of natural gas-fuelled electricity generation, power 30 million electric heat pumps for space and water heating in buildings, and provide enough electrolysis systems to replace half of today’s natural gas-based grey hydrogen with green hydrogen.
We estimate a total cost at c€817bn in the EU, which could benefit the Polar Capital Smart Energy Fund’s portfolio holdings in the clean power generation, power conversion and storage, green hydrogen infrastructure and energy efficiency supply chains.
Accelerating Transition
Efforts outlined in the European Green Deal were primarily driven by the ambition of cutting greenhouse gas emissions by at least 55% by 2030, reaching climate neutrality by 2050. Europe’s strong push for energy independence as a result of Russia’s subsequent invasion of Ukraine will, in our view, further accelerate the transition towards clean energy solutions.
Solar and wind power combined with energy storage, green hydrogen infrastructure, electrification and energy efficiency technologies will allow Europe to achieve the existential targets of energy independency and decarbonisation.
The Polar Capital Smart Energy Fund invests in a diversified portfolio of differentiated companies that are in a strong position to enable and benefit from Europe’s transition towards energy independence and decarbonisation.
By Thiemo Lang, Senior Portfolio Manager, and Güenther Hollfelder, Senior Analyst, Polar Capital Smart Energy Fund.
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