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Playbook for Investing in the Energy Transition Megatrend

Deep Dive
10 May 2024

The energy transition is emerging as a transformative megatrend, reshaping how we consider and consume energy. Analogous to how Wi-Fi has become a fundamental need in Maslow’s hierarchy, energy is quickly establishing itself as an essential, foundational requirement.

This transition is not merely significant; it represents a pivotal, multi-decadal opportunity, marking one of the most critical shifts since the industrial revolution. It has reached an inflection point, making it an imperative and inevitable shift.

Ravi Dharamshi, CIO of Valuequest Investment Advisors, outlines several areas for investments within the renewable energy space in his “Playbook for Investing in the Energy Transition”:

Few of the Focus Areas:

  1. Transmission grids:
    Transmission serves as a vital cog in the wheel of electrification. A smarter, more efficient grid is necessary to meet the demands of the energy transition.
  2. Energy efficiency:
    The push for electrification, particularly using renewables, alongside advancements in clean cooking, electric vehicles and likes will require optimizing current energy systems and innovating new technologies
  3. Shovel Sellers Over Gold Miners
    It is often more predictable and potentially profitable to invest in equipment providers (“shovel sellers”) rather than the unpredictable (“gold miners”). Equipment sellers, who supply the necessary tools and technology, typically experience steadier demand and earnings compared to the producers.

To Learn More and Explore Further:

Download the detailed Playbook for a comprehensive guide on investing in this megatrend

OR

Listen to Ravi Dharamshi’s talk, which he delivered at the 4th India Investment Conference organized by the CFA Institute.