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Decarbonisation Efforts Progress With Practical Solutions
Jun 18, 2025
Jennison Associates’ Jay Saunders highlights key practical trends that will play a vital role in advancing the decarbonisation journey as renewables continue to scale.
Global energy demand is surging due to digitalisation, electrification, and urbanisation, making cleaner energy solutions more urgent. However, achieving net-zero targets remains a challenge. While renewables are key, practical steps like cleaner traditional energy, energy efficient innovations, and infrastructure modernisation are crucial as renewables scale.
Previously supported by low interest rates and public support, companies are now more cautious about energy investments due to political shifts, policy uncertainty, and economic concerns like inflation and recession risks.
Despite these challenges, the energy transition remains a priority, driving corporate investment backed by strong cash flows. As the shift accelerates, new opportunities will emerge, reshaping the energy landscape for the future.
INFRASTRUCTURE MODERNISATION
The rapid expansion of AI is driving higher energy demand, pushing tech companies to secure dependable power sources. This shift creates significant opportunities for renewable energy developers, utilities, and engineering firms as the grid evolves to enhance capacity and reliability in a cleaner, more efficient way. We anticipate robust EPS and dividend growth across the electricity supply chain and U.S. utilities through 2030, fueled by investments in grid modernisation, clean energy initiatives, and widespread electrification.
IMPROVED EFFICIENCY
Rising energy costs are driving the push for energy efficiency as a cost-effective, sustainable solution for households and businesses. Efficiency measures cut energy bills, reduce emissions, and improve energy security. Companies creating innovative solutions like energy-efficient HVAC systems and smart metres are well-placed to benefit from rising demand.
EXPANDED ROLE OF NATURAL GAS
U.S. energy policy seeks to balance environmental goals with the need for reliable, affordable energy. Natural gas serves as a crucial bridge between fossil fuels and renewables, supported by domestic production, improved infrastructure, and innovation. As a cleaner alternative to coal, natural gas remains a key part of the energy mix, while nuclear energy gains traction as a long-term clean power solution.
NATURAL GAS PLAYS A KEY ROLE IN THE ENERGY MIX
Source: EIA as of May 2025.
GROWING ACCEPTANCE FOR NUCLEAR ENERGY
Nuclear energy is emerging as a critical solution for clean, reliable power. Unlike fossil fuels, it produces zero carbon emissions and provides consistent energy, unaffected by weather. Advances in modular reactors and supportive policies are addressing challenges with cost, safety, and waste, securing a prominent role in the future energy mix.
With new plants and extended reactor lifespans globally, demand for uranium from stable regions is growing. Partnerships between utilities and data centres further highlight nuclear power’s potential as a dependable, zero-emission, energy source.
DIVERSITY DRIVES DECARBONISATION PROGRESS
The energy transition requires a long-term, all-encompassing strategy. This approach leverages renewable energy to achieve decarbonisation while incorporating transitional solutions, such as natural gas and nuclear power, to accelerate progress toward that goal. Companies that combine innovation and scale will lead this transformation.
Jay Saunders
Carbon Solutions Strategy
Portfolio Manager
Jennison Associates
"By tackling current challenges and embracing diverse solutions, the world can move closer to a cleaner, more secure energy future."
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