Month: August 2023

In this edition of Asia Infrastructure Commentary, we delve into the subject of Energy Security. We focus on the structural challenges and opportunities in the energy sector and investment outlook for the related infrastructure assets. We believe renewable technologies in the current form are unable to provide reliable and controllable energy at an affordable price to a large section of economy in foreseeable future. As a result, natural gas, the cleanest fossil fuel, will remain critical main transition fuel till new low carbon solutions come to the fore. The Tribeca Asia Infrastructure Fund ‘TAIF’ has a ~12% of its exposure to entire gas value chain across the Asia Pacific market.

While it is important to keep long term objectives intact, the path to transition to ‘stable clean energy systems’ will be turbulent. Thus, we need to focus on the ‘journey’ as well as the ‘destination’. “Energy Security” is the most important bulwark to have a smooth journey in this transition.

In this edition of Asia Infrastructure Commentary, we delve into the subject of Energy Transition and discuss the various aspects of Energy Transition. We expect some pragmatic re-calibration of “Energy Transition policy” in view of its potential impact on inflation and economic growth. First it was China, which dialled back to “focus on carbon intensity reduction” instead of “absolute reduction in carbon emission” with renewed emphasis on nuclear power. Now EU has included investment in gas infrastructure and nuclear energy as part of their “green Investment” mandates.

This sets up the scene for us to discuss different facets on Energy Transition in greater detail in this note. We believe that Energy Transition, a much-talked topic, has an overarching impact on the global environment, decarbonisation agenda and ESG investment. At the same time, Energy Transition may also have its unintended consequence on economy like slower growth, higher inflation, increasing income disparity. We also dwell on this subject along with the infrastructure investment enabling this Energy Transition.