ISSUE BRIEF: The Acceleration of Electrification
Investor takeaways:
- Electrification is a strong investment trend in Europe: It is about to take off.
- This issue brief explores heat pumps and electric vehicles as the twin pillars in electrifying the European economy.
- Electrification is the process of replacing fossil fuel-powered technologies and services with those that run on electricity from renewable sources.
- The future of domestic heating is going low-carbon. The total number of heat pumps in the EU is now 20 million, equivalent to 16% of the heating market.
- A total EU phase-out of fossil fuel boilers by 2025 would have climate benefits equivalent to taking 15 million cars off the European streets – every year.
- The EU Commission targets 30 million additional heat pumps installed by 2030, which is a doubling of the deployment rate, and this target is not unachievable.
- Electric car sales in Europe are accelerating, a trend enforced by a ban on new sales of carbon-emitting petrol and diesel cars by 2035, with a view to getting them off the continent's roads by mid-century.
- The brief gives examples of how three different teams, ‘Nykredit Alternative Investments’, ‘Sparinvest Global Value’ and ‘Global Focus Equity’ are investing into the electrification trend. Each team has their own idiosyncratic and bottom-up investment process.
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ISSUE BRIEF: The Cold Winter Ahead: Understanding Europe’s Energy Crisis
Europe faces the worst energy crisis since the 1970’s, and the issue is top of mind for investors, policymakers and citizens. This issue brief takes a deep dive into the context for our investments, and explores the causes of energy inflation, the impact of energy inflation on citizens, and the industries that will be hit the hardest by rising energy costs. Faced with its high reliance on Russian gas, Europe has had to diversify its supplies preparing for the winter. The response by European governments are examined with a particular focus on Germany, the UK, the Nordics and Denmark.
