Monthly report – October 2024

Monthly fund update

Key points

• The clean energy complex underperformed as a whole in the lead up to the US election, as a result of Donald Trump’s negative rhetoric in relation to renewables and his stated intention to abolish tax incentives provided by the Inflation Reduction Act (IRA).
• With Trump elected President, the perception is that renewables are under pressure, and the future of electricity is all nuclear and gas-fired (“drill, baby, drill”).
• The reality is that the US has increasing demand for electricity for the first time in 20 years (driven by data centres required for artificial intelligence technology). The US needs more electricity generation capacity, quickly.
• New nuclear is extremely unlikely to be part of the picture inside 10 years (despite the considerable hype).
• While renewables are ‘intermittent’ (the sun doesn’t shine at night), it is widely accepted that they are the cheapest form of new electricity generation.
• The solution will not be all nuclear, or all gas, or all renewables, it will be a mix of various technologies combined to maximise reliability and minimise cost.
• A substantial amount of new electricity capacity will inevitably be renewable.
• Clearly this is a totally different reality to the rhetoric. We have a very positive outlook for all electricity generation technologies, their supply chains and associated infrastructure.