At Pareto Securities’ 28th annual Power & Renewable Energy Conference, we presented key trends across the energy system – from offshore wind, renewables and plastic recycling to data centres and AI-driven power demand. If you would like to receive the full presentations from the conference, please contact your representative at Pareto Securities.
Solar and wind are still a relatively small part of the global energy system, but they account for a large share of new energy being added. During her presentation, Equity Analyst Helene Tingvold said: "Solar and wind now account for around 70–80% of growth."
Solar and wind now account for around 70–80% of growth.
China dominates the growth picture for both technologies, but relatively more in wind as the use of low-cost, Chinese components is not as accepted as in solar. The rapid addition of solar capacity is happening in regions with strong solar resources, close to where people live and consume electricity.
Offshore wind projections have been revised over the past year as higher interest rates and rising risk premiums have pushed project costs higher and timelines further out.
According to Equity Analyst Jørgen Søvik Opheim, government support is necessary even in established markets. But, founded in Energy Security, this appears to be provided following high volumes awarded in UK's AR7 and renewed commitments at the North Sea Summit earlier this week.
Capital is not the constraint – grid is. This is a once-in-a-generation industrial wave, and it must be captured, not observed. That requires more power, more flexibility and a grid built ahead of demand.
Lars Over Skorpen. Director of Power & Renewable Energy at Pareto Securities.
Data centers and AI are emerging as major new drivers of power demand and investment. Per-Håvard Martinsen, from Investment Banking, showed how the global build-out of AI infrastructure is creating an unprecedented financing need. “Close to 3,000bn dollars of financing is expected over the next three to four years,"
Close to 3,000bn dollars of financing is expected over the next three to four years.
Hyperscalers are expected to fund around half through their own cash flow, while the rest must come from banks, private credit and the bond markets.
Sindre Wilberg from Investment Banking stated that: “The AI revolution shows no signs of slowing and represents one of the largest investment opportunities we have seen. We believe Norway is uniquely positioned to capitalise across the AI and digital infrastructure value chain, supported by its natural resources and existing infrastructure—from power generation and grid capacity to connectivity and the wider data centre supply industry.”
Plastic recycling is facing a tough near-term backdrop as global supply chains have shifted.
"Plastic recycling is facing a tough near-term backdrop as global supply chains have shifted", said Equity Analyst Fabian Jørgensen. Chinese ethylene overcapacity has driven a 2.7x surge in exports, flooding Europe and pushing down virgin plastic prices. This has stalled recycled plastic adoption and cut recycling asset financing by around 40 percent.
As EU’s Packaging and Packaging Waste Regulation deadlines approach, we expect demand to recover, recycled PET to decouple from virgin plastic pricing, feedstock availability to improve, and recycler economics to strengthen.
