National Grid (NG) GLIO Seminar Session 2 summary

Progress of the energy transition

• Global investment in renewables remains strong, with China leading significant capacity additions, but scaling up is still required to meet 2030 targets.

• Volatility in energy prices, interest rates, and supply chains continues to impact the sector, along with challenges in permitting and licensing.

• Political ambition for renewables is high, but supply chain and industry maturity lag behind, creating a disconnect.

• Renewables are now among the cheapest energy sources, with rapid cost declines in solar and wind technologies.

• Offshore wind and floating wind technologies are advancing, opening new markets and increasing resilience.

Market dynamics and investment opportunities

• The U.S. market is experiencing a seller's market for green power, driven by high demand from tech companies and state-level policies.

• Europe is pushing forward with legislative changes to accelerate renewables, though national implementation varies.

• Corporate power purchase agreements (CPPAs) are becoming more common, especially in the U.S. and increasingly in the UK and Ireland.

• Asset rotation strategies and capital raising continue to fund new projects, with strong value creation from asset sales.

• Private equity and infrastructure funds are increasingly active in acquiring mid-sized renewables companies.

Supply chain, inflation, and project delivery

• Supply chain constraints, especially for offshore wind vessels and HVDC, can delay projects and increase risk.

• Solar panel costs have dropped dramatically, shifting cost focus to labor and construction; wind turbine prices remain stable.

• Industry is maturing by building in contingencies and better risk management for large projects.

• Labor shortages are being addressed through apprenticeships and recruitment from related sectors like oil and gas.