Electrification is one of the largest components of the overall energy transition. It involves the increasing use of electricity as an energy source, motivated by the fact that electricity can generally be cleaner and more sustainable than the sources it replaces. Recent government policy has offered further support for electrification, most notably in the case of 2022’s Inflation Reduction Act in the United States.
There are two aspects to the electrification opportunity for listed infrastructure companies: 1) the expected growth in electricity demand as a result of electrification, and 2) the development of new clean power generation to supply that electricity.
A large proportion of the listed infrastructure asset class consists of electric utilities that own power generation and the transmission and distribution grid. Accessing the electrification opportunity via listed infrastructure companies offers the benefit of defensiveness in addition to steady secular grow