Dear Md Mostafizur Rahman ,

As always, one needs to invest to get a return on investment (ROI).

Regarding energy transition, the highest ROI at modest investment is to use solar PV energy with optional buffer storage in LiFePO4-batteries to save electrical power from the grid which is mainly from fossil fuels in most cases.

For industries producing organic wastewaters a high ROI can be achieved by converting their wastewaters and waste at up to 99% efficiency (certified) to biomethane to directly replace fossil fuels for heat and/or power generation. In addition, the wastewaters will be cleaned by up to 99% as well resulting in huge savings in energy consumption and sludge production in their wastewater treatment. We do this worldwide since 1980 as introduced on https://modelengineering.eu/circulate

Implementation of the process of green transformation of the economy, including the green transformation of the energy sector, i.e. mainly the development of renewable and emission-free sources of energy, is financed primarily from two types of sources, i.e. financial subsidies from the state's public finance system and within the framework of commercial green external financing implemented, among others, through green loans provided by commercial banks and green corporate bonds issued by corporations, companies, enterprises implementing pro-climate, pro-environmental and/or pro-environmental business ventures. In a situation where the said pro-climate, pro-environmental and/or pro-environmental business ventures are implemented by innovative startups that implement and develop eco-innovations and new green energy technologies then they can obtain equity financing through the subscription of shares by an investment fund that co-finances commercial, innovative green business ventures as part of its business model. What scale of financial subsidies are offered to businesses and citizens from the state's public finance system depends on whether the country's government and/or local government authorities are more or less serious about the need to implement processes of green transformation of the economy with a view to moving away from the dirty energy of burning fossil fuels in order to switch to cheaper, clean, green, renewable and emission-free sources of energy, and increasing the scale of implementation of sustainable development goals and transforming the conventional economy into a sustainable, emission-free, green closed loop economy. Commercial banks, on the other hand, by providing green financing, including green loans, green leasing, etc., seek to improve their reputation, their media image, their brand image, and write sustainability and greenness issues into their development strategies and the bank's mission. A key determinant of the extent to which the national government, local authorities, banks, companies and enterprises develop green financing is the level of pro-environmental, pro-climate, pro-environmental awareness of a country's citizens. In the formation of this awareness of citizens, the education system, the media and the political sphere play a key role.

I would like to invite you to join me in scientific cooperation on this issue,

Best regards,

Dariusz Prokopowicz

The above text is entirely my own work written by me on the basis of my research.

In writing this text I did not use other sources or automatic text generation systems.

Copyright by Dariusz Prokopowicz

The energy transition presents several challenges for finance professionals. One of the most significant is the need to understand and navigate the financial implications of the shift to renewable energy. This includes assessing the financial viability of renewable energy projects, managing the financial risks associated with the transition, and ensuring that companies are financially prepared for the transition.

Another challenge is the demand for new investment strategies. Traditional investment strategies may not be suitable for the energy transition, and finance professionals must develop new strategies that take into account the unique features of renewable energy projects, such as their long-term nature and the variability of their output.

Finally, the energy transition is accompanied by a host of regulatory changes. These changes can have significant financial implications, and finance professionals must have a thorough understanding of these regulations and their impacts to manage the financial aspects of the transition effectively.

Energy transition: How finance professionals can overcome challenges

New investment strategies for energy transition

Finance professionals have to devise new investment strategies to cater to the needs of the energy transition. Traditional investment strategies primarily focus on short-term returns and predictable revenue streams. However, renewable energy projects often require significant upfront investment, have longer payback periods, and their revenue streams can be less predictable due to factors such as weather variability.

Despite these challenges, renewable energy projects also offer unique investment opportunities. They can provide long-term, stable revenue streams once they are operational, and they can also contribute to portfolio diversification due to their low correlation with other asset classes. Moreover, investing in renewable energy projects can also bring environmental, social, and governance (ESG) benefits, which are increasingly valued by investors.

To seize these opportunities, we need to develop new investment strategies that take into account the unique features of renewable energy projects. These strategies should focus on long-term returns, account for the risks associated with renewable energy projects, and incorporate ESG factors.

investment strategies for energy transition

Financial implications of the energy transition

The energy transition has profound financial implications. On the one hand, it requires significant investment. The International Renewable Energy Agency estimates that $35 trillion is required by 2030 to achieve the global energy transition. This presents a significant financial challenge, but also a significant investment opportunity.

On the other hand, the energy transition can also bring financial benefits. Renewable energy projects can provide long-term, stable revenue streams once they are operational. Moreover, companies that transition to renewable energy can benefit from reduced energy costs, increased energy security, and improved sustainability credentials, which can enhance their reputation and competitiveness.

However, the energy transition can also pose financial risks. These include the risk of stranded assets – fossil fuel assets that become unviable due to regulatory changes or market shifts – and the financial risks associated with renewable energy projects, such as price volatility and technological risks.

Regulatory changes and their impacts on finance professionals

The energy transition is accompanied by a raft of regulatory changes. These changes can have significant financial implications, and finance professionals must have a thorough understanding of these regulations and their impacts to manage the financial aspects of the transition effectively.

Regulatory changes related to the energy transition encompass a wide range of areas, including renewable energy targets, carbon pricing, energy efficiency standards, and disclosure requirements for climate-related financial risks. These regulations can affect the financial viability of renewable energy projects and the financial risks associated with the energy transition.

Finance professionals need to stay abreast of these regulatory changes and understand their financial implications. This requires continuous learning and a proactive approach to regulatory compliance.

Some of the challenges may include grid infrastructure update cost and workforce transition costs.

Financial Challenges:

Financial Opportunities:

Navigating these financial challenges while capitalizing on opportunities requires strategic planning, policy support, and innovative financing mechanisms to facilitate the transition to renewable energy.