Lucy Heintz article in IPE Real Assets: Energy security and the new geography of power

Heintz argues that Europe’s 2022 gas crisis, Red Sea disruption and the closure of the Strait of Hormuz have exposed the fragility of a supply system built for a geopolitical era that no longer exists. She contends that the centre of gravity is now shifting to Asia, Latin America, CEE and other growth markets where imported fuel dependence has become a macroeconomic liability, demand is rising fastest and renewable resources are abundant. In these markets, she writes, the nature of investment risk has moved from contract security towards grid readiness and delivery capability, rewarding investors with local knowledge and operating experience.

Click here to read the full article online and read on below for a snippet of Lucy’s commentary.

Lucy Heintz, Managing Director and Head of Energy Infrastructure at Actis, commented:

“The most significant development, in our view, is not the disruption to global energy flows itself. It is the acceleration of a capital shift that was already under way. We call this the great reallocation of global energy capital, and for every dollar now directed towards fossil fuel supply, two dollars flow to renewables. This is not the by-product of environmental sentiment; it is a rational response to a system whose vulnerabilities have become difficult to ignore.

“For years, institutional allocators have treated growth market infrastructure as a political risk story, but that perception does not reflect the reality on the ground. Investors with boots on the ground, who recognise that the ability to build, not just allocate, defines success, stand a good chance of realising premium returns.”