Plugging into growth through electrification
Exposure to electrification is best achieved through companies enabling the shift to electricity as a primary energy source globally, writes Federated Hermes' Martin Todd.
Martin Todd, senior portfolio manager for Sustainable Global Equities at Federated Hermes Limited, notes that a recent multibillion-dollar transatlantic tech deal has highlighted the increasing demand for power.
The cost of key electrification components has dropped by around 99% since 1990, making electrified technologies more affordable and accelerating adoption across industries.
- Microsoft and Google are set to invest $30bn and $6.8bn respectively in AI infrastructure, including data centres, in the UK.
- Global data centre electricity consumption is set to double between 2022 and 2030, matching the entire current electricity consumption of Japan.
The dramatic decline in the cost of key electrification components has made electrified technologies far more affordable, significantly improving the economic return underpinning electrification and accelerating adoption across industries.
Author summary: Electrification growth through companies enabling the shift to electricity.