Twenty-five years ago, renewables were niche, grids supported only one-way power flows, and ‘electrify everything’ was aspirational. Looking back through the policy cycles and the market changes, three interesting developments have stood out.
1. Economics
Declining costs have been a major driver. Industry data shows that the cost of solar, wind, and battery technologies, has fallen sharply over the last 15 years. For example, utility‑scale solar costs have fallen by about 90% since 2010, onshore wind by roughly 70%, and lithium‑ion batteries by a similar magnitude. These shifts have allowed renewable technologies to expand far beyond early expectations. Even with recent inflation and supply‑chain challenges, many of these technologies remain cost‑competitive in several markets. In 2024, more than 90% of new global generation capacity added was renewable – an extraordinary figure that would have been unthinkable 15 years ago. (1,2,3,4)
What does this mean for the next 25 years? Lower costs have also broadened the ecosystem. The transition is no longer only about building renewable power plants. It now includes materials, components, software, grid stability services, and other enabling infrastructure. This provides an expanding universe of companies for active managers like us to analyse and potentially identify successful investment opportunities. As these industries mature, we believe winners are likely to be determined by execution and a particular competitive advantage, what we call ‘the moat’, not subsidy cycles.
2. Energy independence is now as powerful a driver as decarbonisation
Events over the past two decades have highlighted many countries’ dependence on global fuel markets. Price shocks and supply disruptions have driven governments to seek greater energy security. Clean energy is now viewed as both a climate solution and a way to reduce exposure to volatile global markets.
This change has influenced policy, leading to support for domestic supply chains, long-term power contracts, and investment in storage and flexible generation. The goal is resilience as much as decarbonisation. (5)
What does this mean for the next 25 years? In our opinion energy security will likely remain a key driver. Major importers, especially in Europe and parts of Asia, now see renewables, nuclear, and storage as tools for energy sovereignty. There is a strong push to replace imported fossil fuels with domestically produced clean power. (6) We anticipate ongoing support for diversified domestic supply chains, long-term contracts such as corporate PPAs, and infrastructure that strengthens system resilience, including storage, flexible generation, interconnectors, and digital grid technologies.
3. Electricity demand is entering a new structural cycle
For years, electricity demand in developed economies grew slowly as efficiency gains offset increased consumption and production moved elsewhere. This trend has shifted, and different factors are now driving demand higher:
- More electric vehicles
- More electric heating and cooling
- Growth in certain manufacturing sectors
- Rapid expansion in data centres and AI-related computing
These trends seem durable, but the pace of growth remains uncertain. It will depend on consumer adoption, policy support, grid capacity, technology costs, and the pace of development of new industries.
Infrastructure is a clear challenge. Many regional grids were not designed for current levels of electrification or the volume of variable renewable generation. As a result, investment needs are increasing across networks, storage, and digital system management. While these needs are significant, their timing and scale remain uncertain. (7)
What does this mean for the next 25 years? If the last 25 years focused on proving and scaling clean technologies, the next phase will centre on building a reliable system around them. We expect continued emphasis on networks, flexible generation, storage, and digital tools to control supply and demand. These areas will likely become more important as electricity use grows.
Grids are now the primary bottleneck, driving one of the largest anticipated capital expenditure cycles in global infrastructure. Investment is trending toward trillions per year, with a growing share directed at networks, storage, and system integration rather than generation alone.
For investors, opportunities have broadened and diversified to include companies focused on grid resilience, power electronics, energy efficiency, and system optimisation, as well as generators. Each area presents risks, including policy uncertainty, technological change, regulatory transitions, and project execution. This points to the need to understand new technologies, maintain valuation discipline, and closely assess operational circumstances.
Conclusion
The past 25 years show that falling costs, persistent innovation, and the need for more electricity and energy security make electrification a strong, long-term driver for the energy transition. Our strategy is to invest in companies with a technological moat, avoiding areas at risk of commoditisation. For investors with a long-term horizon, disciplined about technology risk, policy changes, and execution, the next 25 years offer access to a transition still in its early stages.
1. (July 24, 2025). 91% of utility-scale renewable projects were cheaper than thermal in 2024.
Enerdata. https://www.enerdata.net/publications/daily-energy-news/91-utility-scale-
renewable-projects-were-cheaper-thermal-2024.html
2. (n.d.). RENEWABLE POWER GENERATION COSTS IN 2023. https://www.irena.org/-
/media/Files/IRENA/Agency/Publication/2024/Sep/IRENA_Renewable_power_generation_costs
_in_2023.pdf
3. (December 21, 2023). GenCost confirms renewables remain the cheapest form of energy, as
the cost of nuclear reactors skyrocket. Department of Industry, Science and Resources.
https://www.minister.industry.gov.au/ministers/husic/media-releases/gencost-confirms-
renewables-remain-cheapest-form-energy-cost-nuclear-reactors-skyrocket
4. (March 26, 2025). Record-Breaking Annual Growth in Renewable Power Capacity.
International Renewable Energy Agency (IRENA).
https://www.irena.org/News/pressreleases/2025/Mar/Record-Breaking-Annual-Growth-in-
Renewable-Power-Capacity
5. Xu, Y., Guo, X., Jiang, W. & Zhang, Y. (2026). Geopolitical Shocks and the Global Energy
System: Mechanisms of Spillover Transmission. Energies 19(1).
https://doi.org/10.3390/en19010251
6. (n.d.). World Energy Investment 2024 – Overview and Key Findings.
https://www.iea.org/reports/world-energy-investment-2024/overview-and-key-findings
7. (n.d.). Global Energy Review 2025. https://www.iea.org/reports/global-energy-review-
2025/global-trends
