Abstract
The energy sector is at the precipice of the transition to a low carbon economy. According to the Intergovernmental Panel on Climate Change (IPCC) – in order for global warming to be limited to well below two degrees Celsius above pre-industrial levels by 2050 – the world will need to achieve “net zero” emissions by the same time period. i The scale of the investments needed to achieve net zero emissions by 2050 cannot be underestimated. Indeed, to achieve this objective, the International Renewable Energy Agency (IRENA) estimates that approximately $195 billion of annual investments will be needed over the next two decades in the North American power sector, with 89% specifically earmarked for renewables and power grids. Against this backdrop, we believe regulated US electric utilities are positioned to benefit from the energy transition, as low carbon solutions and technology – coupled with changing regulations, policy, and consumer demands – pave the way for long-term investment opportunities.