A new report from KPMG has revealed that investment in energy transition assets is increasing rapidly, with investments in energy efficiency and renewables expected to be the most attractive in coming years.
The Global Energy Investment Survey surveyed 1400 investors in Australia and across the globe, with 72 per cent agreeing that investment in the space is growing significantly and will continue to do so in the coming years despite a period of high interest rates and geopolitical volatility.
Executives identified energy efficiency – including electrification – as the most attractive investment in the next two years (36 per cent), followed by renewable and low carbon energy (34 per cent).
Some of the other key findings of the report include:
- 64 per cent of investors surveyed said they had invested in energy efficiency technologies over the past two years
- 56 per cent of the investors surveyed said they had invested in renewable and low-carbon energy, and 54 per cent said they had invested in energy storage and grid infrastructure, while 51 per cent said they had invested in transportation and related infrastructure.
- 94 per cent of investors surveyed said they prioritised finding partners who can share the risk (policy or regulatory)
KPMG said the data reflects the IEA’s World Energy Investment 2024 findings that reveal US$2 trillion of the US$3 trillion in global energy investment anticipated in 2024 will be in clean energy tech and infrastructure – close to twice the investment in fossil fuels.
KPMG Global Lead for ESG for Asset Management, Geri McMahon, said one of the biggest drivers of recent activity in the energy transition space has been the policy and regulatory intervention that can be seen around the world.
The report found that investors are looking at everything from solar and wind farms to batteries, power grids, raw materials, synthetic fuels, green hydrogen and electric vehicle infrastructure. Respondents also indicated that emerging technologies, like floating offshore wind, direct air carbon capture and synthetic fuels, are on the radars of some energy transition investors.
According to the report, 25 per cent of survey respondents said they are deliberately not making new investments in fossil fuel energy, meaning investors see a role for fossil fuels, such as natural gas, in the global energy transition.
“There’s value in engaging with more traditional energy businesses on their energy transition plans and understanding how they are looking at the risks and opportunities,” Ms McMahon said.
“By supporting them and monitoring their progress, investors can play a critical role in driving the energy transition.”
While the research highlights growing confidence in the energy transition, KPMG said there are concerns continued investment could slow down due to policy or regulatory risks, with 40 per cent of executives surveyed identified these as the top barrier to investment, with market volatility a close second on 36 per cent.
KPMG Decarbonisation and Nature Leader & Global Head of Renewable Energy, KPMG International, Mike Hayes, said policy and regulatory actions are undoubtedly shaping the energy transition – both as powerful drivers and as obstacles.
“It’s clear that without a supportive regulatory framework, we risk holding back progress in this critical transformation. The path forward demands more than ambition; it needs stable, transparent, and consistent policies, like subsidies for renewables, carbon pricing, and mandates for clean energy,” Mr Hayes said.
“These frameworks don’t just support change; they accelerate it, opening doors to sustained investment and rapid growth in clean energy and infrastructure.”
KPMG said that while there are concerns over regulatory risk, the findings demonstrate a collective view that investment will grow through increased partnerships, with the majority of respondents (94 per cent) say they plan to prioritise finding partners and taking collaborative approaches to share risks, resources and expertise.
KPMG Lead of Global Sustainability for Private Equity, Elizabeth Ming, said “What we’re seeing is an enhanced understanding of the scale of the energy transition and the need to invest in the capital-intensive infrastructure that can help us decarbonise and transition energy sources.
“We need a phased transition that delivers the change needed while maintaining returns for businesses and investors.”
