Perspectives
21 July 2025
Macquarie Asset Management’s Green Investments team manages global assets supporting the energy transition, working with 30+ portfolio companies, many of which are engaging with leading corporates around the world to build green energy and transition solutions.
The world’s surging demand for electricity continues to represent a historic opportunity for the renewable energy sector, which has demonstrated its resilience throughout the challenging macro-environment of recent years.
Following a period of inflation across all energy sources, renewables costs have stabilised as the costs of solar panels and batteries have returned to their historic downward trajectory.1 This structural tailwind is combining with strong policy support across many major developed and emerging markets and surging demand for green power2 from corporates and industry to underpin the resilience of the sector.3
Global clean energy investment reached $US2.1 trillion in 20244 just five years after breaking through the $US1 trillion mark, seeing 11 per cent year-on-year growth.5 This record level is far from marking a peak. Solar installations globally are expected to grow at 10 per cent on average annually in the period to 2030, wind installations at 7 per cent, batteries for power storage at 21 per cent and electric vehicle (EV) sales at 16 per cent (all well above the expected growth rate of the global economy).6
Source: BloombergNEF New Energy Outlook 2025
Note: Other renewables includes geothermal and bioenergy; Hydro includes pumped hydro. The forecast is based on BloombergNEF’s base case scenario (Economic Transition Scenario), consistent with a global warming outcome of 2.6C by 2100 and assuming no further policy support for the energy transition beyond existing measures and that the low-carbon transition is largely limited to the power and transport sectors.
Encouragingly, investor appetite is growing and diversifying across equity and debt solutions to support this trend, building on renewable energy generators' and distributors' track-record of delivering positive returns.7 Institutional investors continue to play a key role in renewable energy and are starting to play a similar anchoring role in newer segments of the energy transition such as energy storage.8 Private wealth investors are also entering this space, with significant potential for this capital pool to grow in the future.
Thanks to their low costs and speed of deployment, solar and wind projects have overwhelmingly become the technologies of choice to meet growing electricity demand across the globe (see chart below). This practical reality has meant that in many countries, renewables deployment is set to exceed existing government targets.9
As the world enters a period of significant electricity demand growth, the solar and wind sectors have established themselves as the largest providers of new supply globally.
In the race to secure new sources of clean electricity, solar and wind have the advantage on cost and on speed of deployment. It takes just 2.3 years on average to get a utility scale solar project from permitting to commissioning in the OECD, 2.7 for onshore wind and 5.4 for offshore wind.
Source: Capacity and generation data from BloombergNEF; Benchmark project development times from Gumber et al. (2024)
However, despite this considerable growth, demand for clean power significantly outstrips supply. The RE100 group of corporate clean energy buyers alone faces an estimated shortfall of 287 TWh per year by 2030 (equivalent to Spain’s gross electricity production in 202310), and electrification and growing demand from data centres to support AI are adding further pressure.11
Data centres currently account for only ~2 per cent of power demand globally. Based on growing demand for AI, data centres could account for 7-8 per cent of demand by the end of the decade.
Source: BloombergNEF, New Energy Outlook 2024; Macquarie Equity Research.
Note: Global electricity demand shown is a projection. Data centre estimate from Macquarie Research. All sectors also including electricity demand from shipping, aviation, rail, agriculture, forestry, fishing and final energy consumption not further specified, as per BloombergNEF’s classification. Base case denotes BloombergNEF’s Economic Transition Scenario, consistent with a global warming outcome of 2.6C by 2100 and assuming no further policy support for the energy transition beyond existing measures and that the low-carbon transition is largely limited to the power and transport sectors. Net zero denotes BloombergNEF’s Net Zero Scenario consistent with a global warming outcome of 1.75C by 2100, fully decarbonising power, transport, industry and buildings by 2050.
Data centre developers and industrials face a particular challenge in their efforts to procure power as their loads tend to be large and geographically concentrated. Their incremental demand can add significant pressure to the grids that they are connected to, whilst their ability to procure more clean electricity may be constrained by competing loads and grid or permitting bottlenecks.12
These demand drivers and constraints are underpinning strong value creation potential for specialist businesses focused on the deployment of renewable energy solutions at scale and tailored to the needs of corporate partners. Macquarie Asset Management Green Investments works with leading corporates across key markets and sectors to deliver utility-scale and onsite renewable energy and transition solutions where they need them.
DESRI develops, owns, and operates utility-scale solar, wind, and battery storage projects throughout the US. The company operates across all stages of a project’s life cycle and has long-term power purchase agreements (PPAs) in place with a diversified base of offtakers, including corporates, utilities, and co-ops in 24 states.
As of June 2025, DESRI’s platform had ~8 GW of gross capacity of projects in operations or under construction, ~4 GW of contracted pre-construction projects, and a development pipeline of over 25 GW.13
Aula Energy, a specialist renewable energy business launched by Macquarie Asset Management in 2023, is dedicated to developing, building and operating onshore renewable energy projects across Australia and New Zealand.
In September 2024, Aula Energy reached financial close on Boulder Creek Wind Farm, a 228 MW project in Queensland, Australia’s longest serving mining region.14 Boulder Creek is Aula Energy's first project to move into construction and will comprise of 38 wind turbines.
The volatility of power prices is increasing across the world, as the build out of flexible power sources lags higher levels of variable solar and wind energy generation.15 Power prices are routinely reaching record-low daytime levels in markets with high solar penetration, such as Germany and California, and during windy periods in Denmark and the UK.
Meanwhile, the cost of battery energy storage systems (BESS) has resumed its sharp decline, falling by 40 per cent over 2023-2024, erasing the increase observed over the recent period of higher inflation. Costs are widely expected to continue to decline, dropping up to 34 per cent over 2024-2030.16
This creates a step-change in opportunity for battery storage developers whose business models are based on providing grid services and power price arbitrage – charging when electricity is cheaper and discharging when it is more expensive – and tend to offer significant locational flexibility and cost advantages over alternatives like pumped hydro or hydrogen. Governments and grid operators are supporting this dynamic by allowing batteries to participate in capacity markets and in ancillary services. In Europe alone, €22 billion in state aid has been approved to support energy storage projects since 2022, contributing to an expected fivefold growth in annual installations between 2023 and 2030.17
Global energy storage specialist and Macquarie Asset Management portfolio company, Eku Energy, recently announced the completion of commissioning the Maldon BESS located in Maldon, in the county of Essex, England.18 The Maldon BESS is Eku Energy’s first UK project to reach commercial operation.
The Maldon BESS has a capacity of 40 MW/40 MWh capable of responding within 350 milliseconds, suited to deliver ancillary and balancing services to support both the local and National Grid. The project has also secured a long-term Capacity Market contract.
Source: Eku Energy
The adoption of clean technology solutions such as solar panels or EVs is rapidly expanding globally.19 At the same time, countries are facing mounting supply chain pressures and shifting geopolitical dynamics, which have led to an unprecedented wave of clean technology manufacturing investment outside of China in geographies like the United States or Europe (see chart below), including in battery manufacturing plants tied to EV supply chains. The ongoing dynamic is marking a radical shift from recent trends in terms of geographic distribution of investment. By 2025, 19 per cent of global investment in clean technology manufacturing is expected to take place outside China, up from 11 per cent in 2023.20
Source: Energy Transition Investment Trends 2025, BloombergNEF
Note: Includes new and planned clean technology manufacturing factory asset finance, with clean technology defined as solar, batteries, hydrogen electrolysers and wind. Includes upstream factories for solar (polysilicon, wafers, cells and modules) and batteries (separators, electrolytes, cathodes, anodes and cells), nacelles for wind and electrolyser stack assembly for hydrogen. Excludes battery metals financing. Manufacturing capacity has been risk-adjusted to account for the likelihood of completion and factory ramp up according to such factors as factory location, manufacturer experience, and capacity of the plant. East Asia (excl. Mainland China) comprises Taiwan, Japan and South Korea.
Crucially, scaling clean technology supply chains and infrastructure is capital intensive and complex. This has created opportunities for new partnerships between manufacturers, public finance institutions, institutional investors and governments, aimed at enabling large scale investments in innovative companies that can scale their production rapidly.
Source: Verkor
Verkor, a Macquarie Asset Management portfolio company also backed by Renault Group and Schneider Electric, was created with the ambition of fast-tracking low-carbon battery production in France, to serve the European market. Verkor’s Gigafactory will be operational by 2025 and is expected to deliver 50 GWh of batteries a year by 2030.21 Adding to this positive momentum, Verkor welcomed EnerSys and ING Sustainable Investments as new investors in October 2024.22
Vertelo, a fleet electrification solutions platform launched by Macquarie Asset Management in 2024, is focused on accelerating widespread adoption of EVs – buses and commercial fleets – in India by offering integrated solutions to customers including leasing and financing, charging infrastructure and energy management solutions, fleet management services, and end of vehicle life management.
The platform has received anchor investment from the United Nations’ Green Climate Fund, which has committed to invest up to $US200 million and is supported by an additional $US205 million of equity investment from other commercial investors. Overall, Vertelo plans to mobilise $US1.5 billion in the Indian e-mobility ecosystem over 10 years.23
Momentum is also building in sectors where electrification and renewables are not a near- or longer-term solution. Our recent experience has shown that there has been a significant pick up in investment opportunities in sustainable aviation and shipping fuels, biomethane, low-carbon fertilisers24 and industrial decarbonisation, anchored through partnerships with large corporates and supportive policies.25
The demand surge for sustainable aviation fuels (SAF)26 illustrates this dynamic. SAF has emerged as a critical near-term decarbonisation solution for airlines beyond flying more efficient airplanes.27 Commitments from early-mover airlines to help build-up a SAF supply chain have driven a surge in offtake agreements and global production capacity is expected to grow to 18.1 Mt by 2030, up from 4.1 Mt in 2024.28
Clear hurdles to large scale deployment remain, notably the scarcity of feedstock and competing technological pathways. SAF producers have limited time to reach scale and secure reliable feedstock sources to meet the demand of airlines. Those that are able to leverage their experience and mobilise capital are likely to stand out in this race.
Macquarie Asset Management supported investment in SkyNRG, a SAF specialist company founded in 2010, to support their next phase of growth. By 2030, SkyNRG aims to build facilities in Europe and the US, in cooperation with strategic offtake partners. To date, SkyNRG has secured partnerships with KLM Royal Dutch Airlines and Boeing (among others), with envisaged long-term commitments of up to €4 billion in SAF purchases at the time of Macquarie investment.29
Debt financing also plays a crucial role in the energy transition, particularly in nascent technologies and hard-to-abate industries, where equity financing may be harder to secure. Beyond our Green Investments team, across the Macquarie Asset Management platform, our Private Credit team is connecting clients with infrastructure debt opportunities that support the transition, including in emerging solutions such as low-carbon steel production, providing a stable source of long-term debt financing for energy transition projects.
In February 2024, Macquarie Asset Management agreed to provide second lien financing (on behalf of NN Group) for the world’s first, large-scale green steel plant.30 Located in Boden, Northern Sweden, the facility is being developed by Stegra and plans to produce 5 million tonnes of green steel annually by 2030.31
Once completed, the Boden plant will use a large-scale electrolyser facility to produce green hydrogen, which is then used to manufacture a variety of green steel products for industries such as automotive and construction. By using green hydrogen instead of coke, a carbon-rich fuel made from coal, CO2 emissions from the steel-making process can be reduced up to 95 per cent compared to traditional steelmaking.32
The energy transition remains a key investment theme for Macquarie Asset Management.33 Across our expanding suite of energy transition platforms we are committed to creating investment opportunities and practical decarbonisation solutions for our wealth and institutional clients and investee companies. This commitment is built on our portfolio of specialist businesses, that are developing and operating the energy systems of the future and are supporting our clients and portfolio companies on their decarbonisation journeys.
You can read more about Macquarie’s wider activities in the energy transition, including details of what Macquarie Capital and our Commodities and Global Markets businesses are doing here.
