Constructing the Energy Transition

If you’re bullish on renewables, you’re bullish on construction.

To reach net zero goals, more than $4 trillion will need to be invested in renewable energy infrastructure globally by 2030, tripling the current installed base of wind and solar. The US is on track to reach $1 trillion in renewable energy investment in the next decade – but as Thomas Edison said, vision without execution is hallucination, and millions of renewable energy assets aren’t built in a day.

From forecasting cash flow to pouring concrete, the energy transition is a massive construction undertaking. As the world moves from centralized power plants to decentralized wind and solar assets, building these distributed energy resources presents unique execution challenges. Installing DERs across thousands of acres requires all hands on deck from a host of specialized teams not currently set up to scale. Procurement of the materials required for these projects (concrete, steel, aluminum, electrical) will drive a super cycle of demand for inelastic construction inputs. Moreover, historically poor construction labor productivity could hinder the industry’s ability to complete these projects on time.

There’s reason to remain optimistic. Due to COVID-19, construction project stakeholders have increased digital tools adoption. From the lender to the material supplier, construction firms are realizing the potential for software and robotics to increase productivity and improve project margins. Lowering renewable project soft costs can ultimately expedite timelines and increase the number of projects deployed. Construction tech is building the way to the renewable energy industry’s lofty goals.

 
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Πηγή: climatetechvc.substack.com