1400 investors surveyed globally
As the dust settles following COP29 in Azerbaijan, the appetite for investment in energy transition assets is increasing rapidly, according to new research from KPMG.
1400 senior executives from around the world, including 50 from Ireland were surveyed for the KPMG Energy Transition Investment Outlook Report, with 84 percent of Irish respondents saying they believe investment in the space is growing significantly and will continue to do so in the coming years, compared to 72 percent globally.
The findings show confidence levels in the energy transition deals and pursuit of investments in clean energy technologies and projects are high, despite a prolonged period of geopolitical volatility and high interest rates.
When asked what specifically they plan to invest in, energy efficiency (e.g. HVAC systems, monitoring and reporting, construction, appliances, smart home/building management systems), was identified by Irish executives as the most attractive investment in the next two years (42 percent) compared to 36 percent globally, followed by renewable and low carbon energy (e.g. solar, wind, hydro, biofuels, nuclear, waste-to-energy) at 40 percent compared to 34 percent globally.
Meanwhile, 70 percent of respondents in Ireland say their organisations invest in energy transition assets to comply with regulations, compared to 56 percent globally.
The data reflects the IEA’s World Energy Investment 2024 findings that reveal some US$2 trillion of the US$3 trillion in global energy investment anticipated this year will be in clean energy tech and infrastructure – close to twice the investment in fossil fuels.
KPMG also asked respondents to highlight one or two regions that would be most attractive for their organisation’s energy transition investment over the next two years. Irish respondents ranked Europe and Central Asia first at 46 percent, followed by East Asia and North America both at 42 percent.
By comparison, 43 percent of global respondents selected East Asia, followed by North America at 39 percent and Europe and Central Asia at 35 percent.
While the KPMG research highlights growing confidence in energy transition, there are concerns that continued investment could slow down due to policy or regulatory risks. Half of the Irish respondents identified regulatory or policy risks as the top barrier to investment in energy transition assets, compared to 40 percent globally. Market volatility is second for 32 percent in Ireland and 36 percent globally.
Nearly half (46 percent) of Irish organisations are investing in energy transition assets for energy security and independence, compared to 37 globally.
While there are concerns over regulatory risk, the findings demonstrate a collective view that investment will grow through increased partnerships. The overwhelming majority of respondents (94 percent) say they plan to prioritise finding partners and taking collaborative approaches to share risks, resources and expertise.
Investors are also mitigating risk through diversity in investment, with fossil fuels continuing to play a key role in an orderly transition. Only a quarter (25 percent) of global executives surveyed said they are not making new investment in fossil fuel, compared to 26 percent in Ireland.
The survey findings reflect the data from the Energy Institute’s Statistical Review of World Energy, in collaboration with KPMG, which found global fossil fuel consumption actually reached a record high in 2023, driven primarily by coal and oil. Despite the rapid growth in renewables, all credible forecasts see fossil fuels playing a steadily declining yet vitally important in the energy mix over the next two decades.
Recent years have shown how fossil fuels – especially natural gas – remain crucial to energy security, with further investment needed to meet energy demand as the transition proceeds.
Reflecting the drive to invest in a broad and diverse set of opportunities, some 68 percent of Irish investors have invested in energy efficiency technologies (including electrification), 62 percent have invested in energy storage and grid infrastructure, 56 percent have invested in transportation and related infrastructure, and half (50 percent) invested in renewable and low-carbon energy.
By comparison, globally 64 percent have invested in energy efficiency technologies (including electrification) over the past two years. Fifty-six percent have invested in renewable and low-carbon energy, 54 percent in energy storage and grid infrastructure and 51 percent in transportation and related infrastructure.
This range highlights the breadth of opportunities for investors, as each area of interest involves many different systems and technologies. While individual projects in renewables, storage or grids often hit the headlines with high dollar-value or gigawatt capacity, energy efficiency investments are often less visible and encompass many smaller investments and optimisations. However, it is estimated that doubling the global rate of progress on energy efficiency could reduce energy costs by one third and deliver 50 percent of worldwide CO2 reductions by 2030.
Explore the growing focus on energy efficiency, renewable energy, and infrastructure upgrades as drivers of investment.
Discover why East Asia, Europe, and North America are leading the charge, and which emerging markets are becoming investment hotspots.
Understand the balancing act between renewable energy growth and the ongoing necessity of fossil fuels for energy security.
Examine the regulatory, technological, and financial risks that investors must manage in order to succeed.
Learn how collaboration across sectors, including public-private partnerships, is key to managing the risks associated with energy transition projects.
Gain insights into the future of energy transition investment, including anticipated growth in energy efficiency, renewables, and transportation infrastructure.
