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CONTRIBUTORS

Stephen Dover, CFA

Chief Investment Strategist
Head of Franklin Templeton Institute

This is a chapter from the Franklin Templeton Institute paper, Energy transition: Accelerating investment opportunities. To read all chapters in this paper, download the complete PDF or click here.

Chapter preview

The energy-water-food nexus is vast in scope and importance, so the number of potential investment themes—and therefore sources of alpha—emerging from it is practically without limit.

In his ongoing efforts to explore future sources of alpha, Chief Market Strategist, Stephen Dover, presents a few vignettes that suggest possible investment opportunities at the intersection of energy, water and food over the medium to long run. In this chapter, we look at the following scenarios:

  • Almost everywhere in the world, the infrastructure for collecting, storing and delivering water needs to be rebuilt or built from scratch, an undertaking that will involve trillions of dollars in infrastructure investments. It will also involve a massive energy expenditure . In the United States alone, an estimated 60.6 terrawatt-hours (TWh) of energy—or nearly 20% of US energy consumption—in 2018 was used to deliver irrigation water.1
  • We discuss “green fertilizer” by diving into the In the Haber-Bosch process, where both water and electricity are key components in electrolysis. As a result, chemists have long attempted to find and implement a more energy-efficient, water-efficient and environmentally-sound fertilizer production process.
  • Finally, we look at how economic growth and the adoption of 21st-century water and agritech/farming practices, including GMO crops and livestock, will enable global per-capita caloric intake to grow in the next 20 years.

Stephen Dover, CFA 
Chief Market Strategist
Franklin Templeton Institute

This is a chapter from the Franklin Templeton Institute publication, Energy transition: Accelerating investment opportunities. Arguably, humanity’s greatest current challenge is the need to shift to low and net-zero carbon in a little less than 30 years. New technologies are accelerating the renewable energy transition while reducing environmental impacts. The renewable energy sources of today and the future require new and smarter technologies as well as the rapid creation of new infrastructure. These challenges create investment opportunities as investors have a critical role given the capital required to fund this transition. To read the full paper and explore views from across our specialist investment managers, download the complete PDF or click here.

Endnote

  1. Source: Sowby, R. and Dicataldo, E. “The energy footprint of U.S. irrigation: A first estimate from open data.” Energy Nexus. June 16, 2022.

 

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