Increasing the role for private capital to drive Europe’s net-zero transition

1. DRIVING THE UK’S CLEAN POWER MISSION 

During the panel on Private Capital, Public Benefit – Driving the UK’s Clean Power Mission, investors and industry leaders explored the critical role of private investment in accelerating the transition to clean energy.  

The discussion underscored the urgent need for policy stability, improved grid infrastructure, and clear government strategies to unlock greater private capital and drive progress towards net zero. 

Market challenges and policy landscape 

Despite the UK’s historic record in attracting private capital, panellists pointed to unpredictable policy shifts as a reason why the country is seeing lower levels of investment than the US or many markets in Asia. Investors highlighted that frequent changes - such as adjustments to EV mandates – have created uncertainty, making it difficult for international capital to commit to UK projects. To build investor confidence, the government must ensure long-term policy stability, accelerate the implementation of planning reforms, and deliver a 10-year infrastructure strategy. This must reflect the needs of investors who are seeking a globally competitive pipeline of opportunities in which to invest. 

Emerging opportunities in clean energy 

The panel spotlighted several high-potential areas for investment: 

• Battery storage – essential for grid stability and meeting Clean Power 2030 targets, but misaligned market incentives have left key areas under-served.
• Energy from waste (EfW) – the UK currently exports large amounts of waste that could instead be converted into domestic energy, representing a major untapped opportunity.
• Transport decarbonisation – electrification of transport fleets, particularly buses, is a growth area.
• Digital infrastructure –  increasing demand for data centres and fibre networks aligns with the UK’s net-zero ambitions. 

Infrastructure bottlenecks and investment barriers 

A lack of grid capacity is one of the biggest obstacles to clean energy deployment. Transmission infrastructure is under-resourced, with slow integration of projects causing significant delays. Similarly, energy storage remains under-incentivised, limiting the UK’s ability to balance supply and demand effectively. 

2. THE EU’S ENERGY TRANSITION 

The panel on Navigating Opportunities in Europe’s Energy Transition explored investment trends, highlighting key challenges and opportunities in electrification, energy storage, and green technology. 

Investment priorities and market dynamics 

Investors reflected on the need to focus on commercially viable projects and avoid being overly dependent on subsidy-backed investments. Nonetheless, they agreed that certain technologies require additional support to ensure institutional capital can be de-risked, or be competitive in comparison to other infrastructure investment. 

Additional pressures including inflation, higher-for-longer interest rates were also said to be having an impact on investments in the EU, given higher costs of capital and refinancing. 

Key growth areas 

• Hydrogen – it is essential that funding uncertainty is addressed to increase investments across the value chain.
• Green Steel – the EU’s Emissions Trading System and Carbon Border Adjustment Mechanism regulations are driving demand for supporting infrastructure.
• EVs – sales are growing but are hindered by charging infrastructure rollout delays and grid constraints. 
• Storage and grid – Lithium-ion batteries are crucial for renewable energy stability, but grid reform is also urgently needed. 

Political developments 

Investors are closely watching the election in Germany and other political developments in the EU. Nonetheless, there’s a view that the EU remains committed to the net-zero transition, retaining the policy tailwind that has driven many investments in recent years. 

Germany and Italy are making positive advances in areas such as storage, while hydrogen, circular economy, and data centre energy efficiency present new opportunities. 

Policy and regulation 

Stronger ESG reporting under EU Taxonomy has raised compliance costs, drawing investor criticism. However, SFDR revisions may improve clarity. Regulatory certainty and better investment conditions remain top priorities. 

Macroeconomic & regional hotspots 

While upcoming EU elections may create uncertainty, electricity will dominate net-zero efforts Germany and Italy lead in storage, while hydrogen, circular economy, and data centre energy efficiency present new opportunities. 

3. THOUGHTS FROM KEYNOTE SPEAKERS 

The role of GB Energy: 

• Focused on accelerating clean energy generation and being an advocate for change to help drive investments forward.
• Plans to build trust between investors, regulators and the government, reducing market distrust. 

DG CLIMA on the need for certainty: 

• The EU will continue its commitment to the Green Deal, focusing more on the economics and the need to increase the competitive offer of climate mitigation and adaptation, including in infrastructure.