Climate investors see opportunity in Trump’s anti-climate push

The barrage of executive orders and agency appointments in the first few months of the second Trump administration has triggered a measure of despair from climate-forward types: For example, ExxonMobil — confident in its drilling technology but also, as my colleague Tim McDonnell put it, in “a growing sense that the climate ambitions of… world leaders are losing political momentum” — plans to increase oil output in the coming years.

Yet that doesn’t mean that the energy transition has stalled, much less reversed. Deep-pocketed investors instead see the bad vibes as creating value by driving down the purchase price of major renewables assets. Qualitas is far from alone: The deputy chief investment officer for renewables at Brookfield Asset Management told Bloomberg last week that “a dislocation between what the market noise is and the fundamentals, that creates a very good opportunity for us.” Senior executives at the investment bank Jefferies and the private equity behemoth KKR echoed those sentiments.

For Perez, the case for the 2024 North Carolina deal is driven both by surging demand for power — thanks in large part to the growth of data centers — as well as mounting stresses on solar developers, making them attractive acquisition targets: Such firms often borrow heavily in order to ready sites for solar farms with the aim of selling them on to operators at a profit — a model that worked well when interest rates hovered near zero, but which has been strained in recent years as the Federal Reserve has ratcheted up borrowing costs.

Oil and gas companies turning away from renewables means there are fewer potential buyers to compete with, while a belief that the energy transition will continue — faster or slower, perhaps, depending on the party in power — means “there’s going to be value,” Perez said, in simply holding assets that sit in the “interconnection queue,” or the waiting list for projects that are looking to sell power to the wider electricity grid.

I asked Perez whether the strategy wasn’t incredibly risky, given the possibility of energy policy swerving further under Trump or rates going up, rather than down, for example. “The point for us,” he replied, “is that the barrier of entry is higher.”

Investor action isn’t the only signal that the energy transition is continuing in the US, despite worries over Trump administration actions: Twice as many companies are increasing their ambitions than those downgrading them, while the number of firms making public their carbon emissions has increased ninefold in the last five years, according to analysis of more than 6,000 corporate disclosures by the consulting firm PwC.

“You can dial up or down how vocal you are about what you’re doing,” David Linich, sustainability principal at PwC US, said in an interview. “And I think we’re seeing a period where a lot of companies are choosing to be less vocal about it, but aren’t on the whole backing off of what they’re doing.”

Among the oil and gas companies that are still betting on US power markets is France’s TotalEnergies, whose CEO Patrick Pouyanné told the Council on Foreign Relations that while “oil and gas is the energy of today… another energy which should offer more opportunities of growth in the future” is electricity.

Still, Pouyanné was skeptical whether renewables were an attractive investment at the moment. Offshore wind, he said, had “no way to progress in the next four years,” and while Total was investing in solar, its intermittency meant it was still not dependable for data centers absent batteries, which he noted were “still expensive.”

While the Trump administration isn’t actively courting green investment, Europe is moving full steam ahead: Speaking at Davos the day after Trump’s inauguration, European Commission President Ursula von der Leyen said, “If you want to upgrade your clean tech industries… Europe is open for business,” while her native Germany this month agreed to relax borrowing restrictions in order to create a €500 billion infrastructure fund, 20% of which will be dedicated to climate investments.