Risks and Rewards of Energy Transition for Investors  

Data and analytics provider Morningstar has said that investors should approach the clean energy transition with a risk/reward mentality to manage uncertainty of the transition in a new report. It said that understanding the scale and scope of the energy transition was the first step to minimising risk and maximising investment returns. It also found that utilities will control the pace of decarbonisation as eliminating carbon emissions would require huge investments in utility infrastructure to support renewable energy, electric vehicle charging, and building electrification. Other insights in the report were that reducing fossil fuel power generation was the first step in decarbonisation and that decarbonising transportation and retail energy use would increase electricity demand. The report forecast that battery electric vehicle adoption will reach 40% globally by 2030, up from 10% in 2022 and that lithium would be one of the largest beneficiaries of the clean energy transition.  

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