It remains to be seen how the recent US presidential election result will impact US policy towards the energy transition, but much of the world is racing towards a net-zero future.
Cutting-edge energy transition technologies are evolving, with first-of-a-kind projects coming to market that are pushing the boundaries of what is possible. Milestones include the first sustainable aviation fuel project financing in Southeast Asia, the world’s largest green hydrogen project financing in the Middle East and the financing of a liquid air energy storage project in the UK—the first of its kind globally. These projects are not just technological achievements; some represent financial innovation in bringing cutting-edge technologies to fruition.
At the forefront of these developments is White & Case, leveraging our experience and expertise across the globe to navigate the successful financing of such projects.
An evolving landscape of transition technologies
The energy transition encompasses a vast array of technologies at different stages of development. The focus here is on the cutting-edge innovations that, after years of research and development, are beginning to mature. These technologies have the potential to redefine how we generate, store and use energy
1. Renewable energy
- Solar power: Innovations such as solar thermal and floating solar farms promise to unlock new potential in harnessing the sun’s energy.
- Wind power: Larger, more efficient turbines and floating windfarms capable of being deployed offshore in deeper waters signal a new phase of growth in the wind sector.
- Hydropower: Small-scale, advanced hydropower systems, high-density hydro, tidal and wave energy technologies offer new options for water-based energy generation.
- Geothermal energy: Enhanced geothermal systems are unlocking untapped reserves of geothermal energy.
2. Energy storage
- Energy storage: Advances in lithium-ion technologies and solid-state batteries are improving storage efficiency, while long-duration energy storage solutions such as flow batteries and liquid air energy storage are making it easier to store renewable energy, thereby increasing grid efficiency.
- Thermal storage: By storing energy in the form of heat—such as molten salt—these systems can store excess energy generated during peak periods for later use, providing stability and reliability to the grid.
3. Carbon capture, utilisation and storage
- Direct air capture: Technologies that remove CO₂ directly from the atmosphere are poised to become critical tools in the fight against climate change.
- Point source emissions capture: These are CCUS projects that involve capturing CO₂ from industrial plants (i.e., point source emitters) rather than directly from the atmosphere.
- Carbon utilisation: Beyond capturing CO₂, there is interest in technologies that convert captured carbon into valuable products, such as synthetic fuel or building materials.
4. Grid modernisation & smart grids
- Smart grids: Digital technologies are transforming how we manage energy distribution, allowing for better integration of renewable energy, improved demand management and grid efficiency
5. Electrified mobility Electric transport:
- The electrification of transport—from electric buses and trucks to planes, ships and trains—is revolutionising mass transport across industries.\
Lessons from cutting-edge transition finance
Cutting-edge energy transition projects that have reached financial close require capital structures put together with considerable care. This involves a coalition of capital, with each lender or investor contributing to the overall capital structure based on its own risk and reward expectation.
An understanding of project finance techniques is, in our view, critical. Project financing seeks to deploy capital against a project’s cash flow, rather than relying on the balance sheet of the project developer. This is clearly attractive to project developers grappling with limited balance sheets and technology risk.
The project finance discipline is used to test the project’s risk allocation, even if it is recognised that the project may depart from ‘project finance 101’.
For example, a turnkey wrapped construction solution, robust take-or-pay offtake, comprehensive insurance or hedging strategy may simply not be available in the market for a nascent technology project or product. Nonetheless, ensuring transaction advisers have a sound understanding of project finance techniques and when and how to negotiate flexibility is critical.
A challenge here is the cost in time and money involved in negotiating and implementing the project development and funding plan. Perseverance, patience and persistence is critical. It helps, of course, for the project to have a robust business case and technology that has been proven at pilot stage..
Conclusion: A multifaceted approach
The financing of cutting-edge transition technologies demands coordination and collaboration across public, private and multilateral sources of finance. While the challenges of financing early-stage technologies are considerable, well-conceived projects targeting profitable segments of the energy ecosystem are reaching financial close. Building a coalition of diverse financing sources plays a central role in enabling rapid scale-up of nascent but transformative technologies.
This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.
Kamran Ahmad is a partner at White & Case LLP.
This article is taken from Outlook 2025, our annual publication examining the year ahead in energy. Subscribers can click here to read their free copy. The publication can also be bought from our store here.
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