Is the energy transition sustainable?

Despite some potential headwinds for renewable energy production in the US, there is little sign that renewables investment will fall by the wayside.

The European market, supported by positive policy, is buoyant. This is despite a changing market structure as government subsidies are gradually withdrawn and more renewable projects operate at market costs and prices.

This shift calls for greater expertise in how deals are structured. ‘We are much more agile in how we source and secure strategies,’ says Raphaël Lance, Head of Energy Transition Funds at Mirova, an affiliate of Natixis Investment Managers.

Rather than dealing solely with governments, Mirova now often signs bilateral agreements with single, large companies, or groups of companies seeking green power. Mirova employs a team whose sole job is to deal with tender processes and find the best deals for its power operations.

Key to the success of this evolving strategy is reliability. Companies buying green power need to know it will be available and at the right scale. Raphaël says: ‘If a company is going to open a data center in a year’s time, it needs to be sure sufficient power will be available in exactly one year from now.’

This kind of construction risk has increased the complexity of Mirova’s projects, he notes, but also creates more value for investors when they are executed to specification and on schedule.

Storage is critical to effectiveness of renewables

The inability of grids to solve the supply and demand equation was a key factor behind the power cuts across Spain and Portugal in April 2025.¹ Better power storage for renewable energy and a shift in the configuration of grids could prevent similar outages from occurring in the future.

As renewable energy increases, there is a need to store overproduction, particularly in the middle of the day when supply is high and consumption is low. ‘There is a great arbitrage opportunity here,’ says Raphaël.

‘Storage capacity can take energy out of the grid very quickly, so you get paid for storage when there is oversupply. You also get paid for injecting it into the grid at times of high demand.’

Mirova has made a number of storage investments across Europe, with the UK leading the way, and Germany and France close behind. ‘Today, we cannot contemplate building a solar plant without creating storage facilities alongside it,’ Raphaël adds.

Hybridization: decentralizing power generation

Storage innovation will provide the foundation for decentralized power grids, and thereby for optimized supply and demand. The move from centralized to decentralized generation also requires investment in the grid infrastructure to facilitate the development of local energy storage solutions.

These solutions may be wind or solar, or they may be everyday items used by consumers, such as EV cars. Raphaël says: ‘From a grid viewpoint, cars are just batteries and, as such, can help stabilize the grid. Cars can, for example, take from the grid during the night at a time of cheap production and return to the grid in, say, the evening when consumption spikes.’

Investment is required for hybridization of the grid, whereby several modes of electricity generation can be either injected or removed from the system. Hybrid grids offer high levels of energy security through the mix of generation methods.

‘A number of countries allow for hybridization in order to reduce intermittency, with investment particularly strong in Spain, Portugal, and Poland,’ Raphaël notes. These fast-evolving energy technologies will soon be supercharged by AI, which can predict and target even more precisely power supply and demand, and thereby optimize grids. As Raphaël says: ‘We are at the start of the growth of smart grids and smart consumption.’

Renewable infrastructure proves resilient

The development of renewables technology means there is plenty of value to be captured, in both energy production and the infrastructure that enables it. This is particularly true of the mid-market space that Mirova inhabits, where less institutional money is chasing the same assets. ‘We have six vintages, but our overall assets are still relatively small, so we can be nimble and flexible,’ says Raphaël.

Mirova has deployed €2bn in equity transactions over the past two years, bringing the total of projects financed to well over 1,000 across 20 OECD countries. It manages €4.5bn in energy transition infrastructure funds.²

Energy infrastructure projects have proved resilient in the face of inflation in the last three to four years, as power revenues have matched, or even outpaced, inflation measures. ‘There was little inflation before 2022, so it was hard to show energy transition infrastructure was resilient to inflation. But since 2022, it has proven to be a good diversifier and a defensive strategy in a volatile environment,’ Raphaël says.

As the strategy grows, so does the Mirova team. The firm deploys local teams across Europe, in France, Poland, Greece, and Spain, as well as an emerging markets team.

Navigating the value chain

The renewables sector is evolving rapidly, and investors must be fully engaged with new services and solutions in order to participate.

‘You have to optimize the whole power generation value chain today,’ says Raphaël.

This creates a lot of potential value for investors and operators who understand how power markets are shifting, have long-established networks and are positioned for rapid change.

About
Raphaël joined Mirova in 2009 as Managing Director of the renewable energy funds. He has since successfully led the team and launched several funds, allowing Mirova to become a leader in the energy transition, with €4.5bn AUM. He is also in charge of the energy emerging market team following the acquisition of Sunfunder in 2022. He is a member of the Mirova executive committee. Raphaël started his career at Crédit Lyonnais in the Project and Asset Finance division before joining General Electric, where he worked for 12 years.

This article originally appeared in Infrastructure in 2026.

_{1 https://www.theguardian.com/business/2025/apr/28/spain-and-portugal-power-outage-cause-cyber-attack-electricity
2 Mirova, as of end Q3 2025}

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