Driven by the ongoing imbalance between energy supply and demand and the tightening of regulations that aim to mitigate the effects of climate change, the energy sector is becoming cleaner, cleverer and more competitive, according to a Julius Baer study, “The energy transition”.

And innovations which focus on the development and modernisation of energy-related infrastructure are seeing an upsurge. While the focus has been on renewable energy, growth will also come from technologies that promote the cleaner use of carbon fuels, as well as energy-saving solutions.

Julius Baer’s analysts believe that innovations promoting the environmentally friendly use of coal and energy-saving solutions will generate attractive investment opportunities.

The world’s second most important energy carrier after oil, coal is abundant and cheap, but its use is highly polluting. Technologies to clean up coal power are readily available and, with prices for pollution likely to rise, represent an attractive opportunity for investors.

The demand side of the energy infrastructure has been neglected in the past. However, its high potential for efficiency improvements is increasingly attracting the attention of consumers. In light of growing energy bills, this cheap, fast and environmentally friendly way to balance supply and demand will increase the scope for innovative investment solutions.