- Electrification, decarbonisation & AI-driven power demand expand the renewables addressable market
- Geopolitical disruptions are accelerating renewable deployment as countries diversify energy sources
- Solar PV and wind are set to maintain double-digit growth
- Solar and wind have achieved sustained cost competitiveness, underpinning durable long-term adoption
- Attractive exposure across developers, BESS, and grid infrastructure
Renewable energy is set to become increasingly central to global electricity generation by 2030, driven by decarbonisation, electrification, AI-related demand, and the need for national energy security. Major economies are accelerating investments in utility-scale solar, wind, and battery energy storage systems, as well as smart grid infrastructure, with global trends indicating a steady rise in renewable penetration since the 2000s. The sector now offers compelling opportunities across its supply chain, as cost competitiveness, structural demand, and strategic importance position renewables for self-sustaining long-term growth.
Robust renewable deployment in the power sector reflects a structural cost advantage. Renewable electricity generation continues to expand globally, with solar PV and wind delivering 30% and 11% CAGR over 2019–2025, respectively. A key driver of the accelerated adoption was the improving cost competitiveness of renewables vs fossil fuels. Since 2010, the levelised cost of electricity for renewable generation has declined remarkably, supported by ongoing technological improvements, increasingly competitive supply chains, and economies of scale. We expect these growth trajectories to remain intact, with the International Energy Agency (IEA) forecasting CAGRs of 17% for solar PV and 11% for wind over 2025–2030, lifting their combined share of global electricity generation to 27% by 2030 (from 17% in 2025).
Renewables are not only an energy-transition and AI-enabler theme, but also a national energy-security imperative. We see renewables as an attractive way to capture incremental electricity demand from decarbonisation, electrification, and AI-driven load growth. Notably, US hyperscalers are increasingly investing directly in solar and storage projects to supply power to their data centres, reducing reliance on traditional power purchase agreements. Additionally, recent fossil-fuel supply disruptions around the Strait of Hormuz underscore the strategic value of renewables for national energy security, strengthening the case for faster deployment. Historically, supply shocks – from the 1973 oil crisis to the 2022 Russia–Ukraine war – have accelerated efforts to diversify energy sources, supporting a steady rise in renewable penetration across major economies. We expect these dynamics to re-emerge, with utility-scale solar and wind developers among the key beneficiaries as investment across the renewables value chain accelerates.
Alongside, we see compelling investment opportunities within the renewable energy supply chain. These include:
Battery Energy Storage System: The rapid advancement and declining cost of battery energy storage systems (BESS) presented a transformative opportunity for utility-scale solar and wind developers. By co-locating storage with grid, developers can address the intermittency challenge that has historically been cited as a limitation of renewable energy such as solar and wind as BESS stores excess electricity during periods of excess generation and releases it when demand exceeds supply. These systems work as a critical enabler of renewable energy ecosystems - allowing for grid flexibility, improving grid reliability and efficiency, and supporting the integration of variable renewable energy sources. Global utility-scale battery installed capacity has increased around 20x since 2019 to 124GW in 2024, and we expect further growth in the near-to-long term driven by rising electricity demand and global efforts to diversify battery supply chains beyond China. This is particularly relevant as more than 90% of battery storage applications rely on LFP batteries that are almost exclusively supplied from China. Against intensifying competition in BESS market, we prefer companies with clear cost and technology advantages and demonstrable pricing power, as they are best positioned to capture growing demand from grid operators and to secure direct corporate offtake agreements.
Grid infrastructure: Smart grid solutions and long-term investment in new grids. While accelerating investment and buildout of new grids remains imperative, long lead times for new grid infrastructure (5–15 years vs 1–5 years for solar PV and wind) have left grid expansion lagging behind renewable generations. As a result, c.2,500GW of renewables, large-load, and storage projects are currently stuck in global interconnection queues. In the near term, deploying grid-enhancing technologies on existing networks is critical to unlock additional hosting capacity, improve flexibility and reliability, and reduce overall system costs. The IEA estimates that scaling these solutions globally could free up sufficient capacity to connect 450–700GW of advanced-stage projects. Against this backdrop, we expect companies positioned across these infrastructure layers – particularly those at the forefront of innovation – to benefit from stable revenues, rising demand for clean-power integration, and structural tailwinds from the energy transition and AI-driven electricity demand.
Exposure for renewables can be gained through selected stocks in the European utilities sector, Asia’s utilities sector and industrials, as well as infrastructure funds with exposure to renewables. Europe has emerged as a global hotspot for renewables, underpinned by strong policy leadership, regulatory clarity, and accelerating energy needs. The geopolitical crisis near the region has intensified the push towards domestic energy independence, significantly accelerating the deployment of solar, wind, and supporting infrastructure across the region. In parallel, Asia represents the industrial and manufacturing backbone of the global energy transition, particularly in renewables and battery technology. The region—led by China—dominates solar PV, wind components, and battery supply chains, especially lithium iron phosphate (LFP) technologies, enabling significant cost advantages and global scalability. Asian markets also continue to drive renewable capacity additions, supported by domestic demand, export competitiveness, and policy support.
Figure 1: Share of renewable energy has been rising for major countries since the 2000s
Source: LSEG, DBS
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