Net Zero Investor’s Nordic Investment Summit 2027 – Energy Security

The role of renewable energy in building energy security has become prominent in the aftermath of Russia’s invasion of Ukraine. Net Zero Investor’s coverage of Tyligulska – the world’s first war time windfarm – highlighted how Ukraine’s wind energy industry responded to the war with remarkable resilience and courage. DTEK Renewables experience of building a wind energy asset 100kms from the frontline during the war shows why decentralised energy systems offer more security benefits than centralised fossil fuel assets. Investors such as EIFO, EBRD and IFC also played a key role by designing financial instruments to support Ukraine’s wind energy industry despite on-going security risks.

The EU is in the midst of reviewing its Arctic policy. As policy consultations progress, investors have weighed on. In May this year, 12 institutional investors including some of region’s largest pension, insurance and SWF investors wrote to the EU warning lawmakers against the risks of further oil and gas expansion. Investors say that while energy security concerns were noteworthy, the Arctic’s ecosystems are highly sensitive and vulnerable. This requires the EU to carefully balance energy security concerns against investors asking the group to maintain its stance on protecting fragile ecosystems in the Arctic.

The investment case for renewable energy companies and assets has evolved in recent years. Across equities and infrastructure, improving asset quality, lower technology cost curves, stable cash flows and strong credit quality have offered opportunities to integrate renewable energy assets into various parts of the pension asset allocation plan. Net Zero Investor’s interview with PensionDanmark showed how the exposure of a 65-year old member to renewable energy assets is higher than younger members. This example highlights the changing terrain of integrating renewables into portfolios.

Historically, investor focus in renewable energy has focused on generation. In particular, investors have favoured large scale, connection ready assets. Now, different parts of the value chain are emerging as investment opportunities for investors to consider. Mid-market renewables, grid technology and infrastructure, battery energy storage and consumer technologies are examples of a widening opportunity set for investors. However, given differences in asset quality, scale and prices investors have headwinds particularly when the size of capital outweighs the opportunity on offer. Can the market respond and find middle ground?