Transport’s road to the future

The ground transport sector has been slow to transition to green alternatives, with electric vehicles (EV) making up only 3.64% of global market share in 2020[2]. Although there has been a surge of EV charging station development in recent years, with cities and governments racing to install this infrastructure, there is still not the substantial shift in ownership that has been anticipated. For example, in the UK, there are 495,000 registered EVs[3] and 23,335 EV charging stations[4] or one charger per 23 EVs, ignoring the home chargers which many EV owners have installed.

In addition, many public EV charging companies have been acquired either by oil majors (BP Chargemaster[5] and Shell Ubitricity[6]) or SPACs (EVgo[7] and ChargePoint[8]).

These trends are driving institutional investor interest in alternative opportunities, including investing in EV charging infrastructure for private vehicle fleets and grid connection for EV chargers - where there is increased potential for investment[9]. Fleet vehicles are smaller ecosystems of EVs supported by their own infrastructure, which can make for attractive investment offerings because there’s no need for higher end users in the open market.

Whether large or small ecosystems, the supporting infrastructure of EV charging (such as cables, transformers, and battery switching stations) is also seeing investor interest. The global EV charging cable market forecast is expected to surpass $1,277.7 million by 2026, rising from $142.9 million in 2018[10]

Investor interest will also undoubtedly be driven by public funding which, as consumer interest in EV grows, looks set to be increased. In France[11] and Spain[12],[13], we’ve already seen EV subsidies, with France’s EV market share rising from 0.5% in 2013 to 2.8% in 2019, and during the first six months of 2020, EV sales achieved a record 9.1% market share[14]. As stability of funding for EVs continues, so too we believe will M&A in the space.


Heavy industry’s light at the end of the tunnel

Heavy industry is coming under increased scrutiny to transition to greener methods of production[15],[16].  An example of this is the steel industry, which requires extreme heat for steel production and is the largest industrial producer of fossil fuel emissions outside of the energy industry[17]. In Germany, the Thyssenkrupp’s Duisburg steel plant produces approximately 20m tonnes of carbon dioxide per year, close to 2.5% of the country’s CO2 emissions[18], but is already starting to transition to hydrogen fuel[19] as Germany looks to shift its heavy industry to greener alternatives.

We believe hydrogen fuel will play a key role in the energy transition of the industry by reducing these fossil fuel emissions. Green hydrogen as a fuel source could result in truly net-zero carbon emissions for heavy industry, but the transition to green hydrogen will require investment in hydrogen production technology and increasing efficiency. Heavy industry will also want to ensure sufficient supply of hydrogen in order to prepare itself for the required transition. With investors in hydrogen production projects requiring clarity on the offtake of hydrogen, this creates a chicken-and-egg phenomenon when it comes to financing green hydrogen production. Governments can play a vital role here by guaranteeing offtake prices for such projects, as seen in Germany[20], the UK[21] and the Netherlands[22]. This will enable the first hydrogen projects to be built and thereby kick-start the decarbonisation of heavy industry. For this reason, countries such as Poland are beginning to incentivise development of their hydrogen industry[23], increasing M&A in the longer term.

In order to truly decarbonise heavy industry, using renewable sources of electricity to produce hydrogen could be the way forward. Green hydrogen provides a way for the renewables sector to open new markets and via the production of hydrogen, renewable energy can graduate from a local electricity play to a global energy and commodities play. It will also be very much welcomed by investors in solar and wind, as it provides an opportunity to secure long-term revenues from their generated electricity to attract cheap financing. In countries like Italy[24] and Sweden[25], where governmental support has been abolished, investors are fiercely competing for power purchase agreements (PPAs), which is very much a buyers’ market with prices much below the spot market. Green hydrogen is an excellent alternative offtake solution for projects in such countries. Its importance will only grow when the installed capacity of renewables grows further and the pressure on heavy industry to decarbonise will intensify.


The new renewables

The renewable energy sector has seen large growth in the past 10 years, with just under 200GW being produced globally from renewable sources[26]. Now that there is a more established and competitive market for some means of electricity generation[27], we are seeing new technologies at the beginning on their growth journeys – presenting multiple investment opportunities.

Established renewables have seen increasing interest from investors over the past decade, due to the demand for renewable energy sources and relative ease of land-based project deployment. These include:

  • Solar photovoltaic (PV)
  • Onshore wind

However, these markets are now becoming saturated and competing on price[28],[29]. Floating offshore wind is an attractive alternative to investment players, as the market is less developed and therefore less competitive. It can also potentially power 12 million homes in Europe by 2030[30] as approximately 80% of the world’s offshore wind resource potential is in waters deeper than 60 metres[31], attracting investors due to sheer potential as an energy source.

That said, our partners Green Giraffe, see the supply chain as a major barrier to development of the space. They believe that manufacturing the floating terminals is the main factor preventing floating offshore wind expansion, with each terminal currently taking approximately 1 month to produce. On current production times, 8-20 floating terminals can be built in the expected 12-24 months to produce approximately a 100-300 megawatt capacity. However, to implement larger projects with a 600-750 megawatt capacity, up to 50 floating terminals would be needed, which could take more than four years to produce. Additionally, they believe that significant improvements to cable design will need to be made before floating offshore wind can reach commercially viable levels, which will attract investors and generate deals.

We believe that the development of offshore floating wind as an industry will benefit from cross-border collaboration, and integration of power markets. This has been seen in Europe, with projects of common interest (PCIs)[32], and will hopefully increase the number of viable deals in the investment space by increasing technology development and grid integration while reducing producing time and cost through economies of scale.



As investors look to transition their traditional energy infrastructure to align with greener, sustainability-focused targets, the three sectors above will play key roles in the future of infrastructure investing. Those who understand how each sector’s growth journey will play out, and more importantly how they can contribute to it, will be in the strongest position to transition their investments and build out the industry to support future investment opportunities.  


To learn more about our strategic partner Green Giraffe’s activity in the renewable energy market, see here.




[1]Environmental, Social and Governance (ESG): An opportunity for Asset Managers’, PWC, 27/04/21

[2]Global EV Outlook 2020’, IEA, 27/04/21

[3]  ‘Electric car market statistics’, Next Greencar, 27/04/21

[4]EV Charging Stats 2021’, Zap Map, 27/04/21

[5]BP to acquire the UK’s largest electric vehicle charging company’, BP Pulse, 28/06/21


[7]LS Power Completes Acquisition of EVgo’, EVgo, 16/01/21

[8]ChargePoint, Inc. to Become Public Company, Advancing EV Charging Network’s Reach Across North America and Europe’ ChargePoint, 30/12/20

[9]Building Back Better: An opportunity to be ‘Fleet’ of foot’, PWC, 27/04/21

[10]EV Charging Cable Market Report’, Research Drive, 27/04/21

[11]Prime à la conversion, bonus écologique : toutes les aides en faveur de l’acquisition de véhicules propres’, Ministère de la Transition écologique, 27/04/21

[12]Disposición 6235 del BOE núm. 169 de 2020’ Agencia Estatal Boletín Oficial del Estado, 27/04/21

[13]Disposición 7311 del BOE núm. 185 de 2020’ Agencia Estatal Boletín Oficial del Estado, 27/04/21

[14]Baromètre mensuel : un mois de juin 2020 record pour les immatriculations de véhicules électriques et hybrides rechargeables’, Avere France, 27/04/21

[15]The challenge of reaching zero emissions in heavy industry’, IEA, 27/04/21

[16]Pandemic forces steel industry to confront its Achilles heel’, Financial Times, 27/04/21

[17]'Green steel’: the race to clean up one of the world’s dirtiest industries’, Financial Times, 27/04/21

[18]Hydrogen: can the lightest gas turn heavy industry green?’, Financial Times, 27/04/21

[19]OGE, Thyssenkrupp and Equinor hatch hydrogen plan for Duisburg steel’, Reuters, 27/04/21

[20]The National Hydrogen Strategy’, Federal Ministry of Economic Affairs and Energy, 27/04/21

[21]The Ten Point Plan for a Green Industrial Revolution’, Department for Business, Energy & Industrial Strategy, 27/04/21

[22]Government Strategy on Hydrogen’, Government of the Netherlands, 27/04/2

[23]Public consultations of the draft "Polish Hydrogen Strategy" are now underway’, Ministry of Climate and Environment, 27/04/21

[24]THE FUTURE OF ITALY’S PPA MARKET’, Aurora Energy Research, 27/04/21

[25]Sweden's developers offer Europe's 'cheapest wind PPAs'’, Wind Power Monthly, 27/03/21

[26]Renewables 2020’, IEA, 27/04/21

[27]How competition is driving down prices in Solar Energy’, Carbon Track, 27/04/21

[28]How competition is driving down prices in Solar Energy’, Carbon Track, 27/04/21

[29]Onshore wind is more competitive than ever’, Wind Power Monthly, 27/04/21

[30]The future of offshore wind is afloat’, Equinor, 27/04/21

[31]The future of offshore wind is afloat’, Equinor, 27/04/21