电气化正当时—欧洲经济力量的崛起（英）-高盛VIP专享VIP免费

下载本文档

阅读 454
格式 pdf
大小 2.84 MB
约47页
2023-04-18
收藏
点赞(0)
海报
举报

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result,

investors should be aware that the ﬁrm may have a conﬂict of interest that could affect the objectivity of this

report. Investors should consider this report as only a single factor in making their investment decision. For

Reg AC certiﬁcation and other important disclosures, see the Disclosure Appendix, or go to

www.gs.com/research/hedge.html. Analysts employed by non-US afﬁliates are not registered/qualiﬁed as

research analysts with FINRA in the U.S.

The Goldman Sachs Group, Inc.

Alberto Gandolﬁ

+39(02)8022-0157

alberto.gandolﬁ@gs.com

Goldman Sachs Bank

Europe SE – Milan Branch

EQUITY RESEARCH | January 24, 2022 | 5:42PM EST

The rise of Power in European Economies

The rise of power in European economies:While our previous research has fo-

cused on the 2050 net zero end game, here weexplorea more immediate, more

tangible topic;one that is poised to revolutionize European economies andour

everyday lives: the urgency of electriﬁcation. Late last year, the Fit for 55 plan

(F55) and itsGerman translationgave us a glimpse ofhow the immediate fu-

turemightlook– and that is,much more electric. In fact, as stated in F55, the

most effective way for Europe to reach a 55% reduction in emissions by 2030is

through a major electriﬁcation process, a process thatis about to start.

Major shift in power demand:On our estimates, electriﬁcation could lead to a

c.50% increase in power demand to 2030,reversing a near15-year negative

trend. This should be driven by incremental demand from new sourcessuch as

passenger cars, heat pumps, industrial motors, and electrolysers.By 2030, elec-

tricity could account for c.50% of primary energy consumption, vs. c.20%

today.

The urgency to accelerate green energy investment:We estimate thatelectri-

ﬁcation could require Europe to mobilise €3.7 tn of capital over the coming nine

years, most of which in green energy infrastructure(more than half).

Power prices to show more near-term resilience:Given the consistentclosure

of legacy power plants, and the execution risks associated with smoothly accel-

eratingwind/solar additions, the supply/demand balance of European power mar-

kets could tighten, supporting higher power prices to2025E (e.g. Germany).

Solidreturns, double-digit growth, meaningful upside to intrinsic value:We

believe this backdrop will have three main consequencesforthe Green Energy

Majors (GEMS): (1) much higher returns than expected (2) double-digit earnings

growth to 2027E, twice the level of the market; and (3) signiﬁcant intrinsic value

creation, even assuminga 50 bp in-crease in nominal WACC.

Ajay Patel

+44 20 7552-1168

ajay.patel@gs.com

Goldman Sachs International

Mafalda Pombeiro

+44 20 7552-9425

mafalda.pombeiro@gs.com

Goldman Sachs International

Amishi Garodia

+1 212 934-6393

amishi.x.garodia@gs.com

Goldman Sachs India SPL

Simon Bergmann

+44 20 7552-8588

simon.bergmann@gs.com

Goldman Sachs International

Mathieu Pidoux

+44 20 7051-4752

mathieu.pidoux@gs.com

Goldman Sachs International

Note: The following is a redacted version of the original report published January 24, 2022 [83 pgs].

Executive Summary

While our previous research has focused on the 2050 net zero end game, here we

explore a more immediate, more tangible topic, one that is poised to revolutionize

European economies and our everyday lives: the urgency of electriﬁcation. Late last

year, the Fit for 55 plan (F55) and its German translation gave us a glimpse of how the

immediate future might look – and that is, much more electric.

In fact, as stated in F55, the most effective way for Europe to reach a 55% reduction in

emissions by 2030 is through a major electriﬁcation process, a process that is about to

start. We believe that this will have three main outcomes for the sector:

Power demand will begin to grow, strongly, inverting a near-15-year negative

trend. We estimate a 50% increase in power consumption to 2030. By then,

electricity could represent c.50% of total European primary energy consumption, vs

c.20% today.

Europe will need to mobilise €3.7 tn of capital, most into green energyn

infrastructure, to develop renewables, upgrade power grids, refurbish buildings and

to support the switch to electricity for mobility, real estate and manufacturing.

Power prices to be temporarily supported, as certain power markets (e.g.,n

Germany) are likely to tighten over the coming 3-5 years, owing to the extremely

rapid phaseout of thermal plants (which is unlikely to be fully offset by the gradual

acceleration in RES additions, until later in the decade).

24 January 2022

Goldman Sachs Utilities and Green Energy

24 January 2022

Goldman Sachs Utilities and Green Energy

The rise of power in European economies

Late last year, the Fit for 55 plan (F55) and its German translation gave us a glimpse of

how the immediate future might look. In fact, as stated in F55, the most effective way

for Europe to reach a 55% reduction in emissions by 2030 is through a major

electriﬁcation process (automotive, real estate, manufacturing, green hydrogen), a

process that is about to start. As a result, the share of power in the primary energy mix

in Europe could increase to c.50%, vs. c.20% today.

Major shift in power demand: 50% increase by 2030E

Currently, European power consumption is c.5% below the 2008 level. On our

estimates, the electriﬁcation process could lead to a c.50% cumulative increase in

power demand by 2030, reversing a near-15-year negative trend. This would be driven by

incremental power demand from new sources, such as passenger cars, heat pumps,

electric motors, and electrolyzers.

Exhibit 1: In 2019, renewables and nuclear accounted for c.20% of

primary energy in Europe

Primary energy consumption mix Europe, 2019

Exhibit 2: By 2030, electricity’s share (nuclear and renewables) of

primary energy could increase to c.50%, driven by electriﬁcation

Primary energy consumption, Europe 2030E

Source: OurWorldInData, BP We assume growth is offset by energy efﬁciency measures, i.e. that total primary energy in

2030E = primary energy in 2019

Source: OurWorldInData, BP, Goldman Sachs Global Investment Research

/47

下载本文档

文本预览下载提示常见问题

GoldmanSachsdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethattheﬁrmmayhaveaconﬂictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertiﬁcationandotherimportantdisclosures,seetheDisclosureAppendix,orgotowww.gs.com/research/hedge.html.Analystsemployedbynon-USafﬁliatesarenotregistered/qualiﬁedasresearchanalystswithFINRAintheU.S.TheGoldmanSachsGroup,Inc.AlbertoGandolﬁ+39(02)8022-0157alberto.gandolﬁ@gs.comGoldmanSachsBankEuropeSE–MilanBranchEQUITYRESEARCHJanuary24,20225:42PMESTTheriseofPowerinEuropeanEconomiesTheriseofpowerinEuropeaneconomies:Whileourpreviousresearchhasfo-cusedonthe2050netzeroendgame,hereweexploreamoreimmediate,moretangibletopic;onethatispoisedtorevolutionizeEuropeaneconomiesandoureverydaylives:theurgencyofelectriﬁcation.Latelastyear,theFitfor55plan(F55)anditsGermantranslationgaveusaglimpseofhowtheimmediatefu-turemightlook–andthatis,muchmoreelectric.Infact,asstatedinF55,themosteffectivewayforEuropetoreacha55%reductioninemissionsby2030isthroughamajorelectriﬁcationprocess,aprocessthatisabouttostart.Majorshiftinpowerdemand:Onourestimates,electriﬁcationcouldleadtoac.50%increaseinpowerdemandto2030,reversinganear15-yearnegativetrend.Thisshouldbedrivenbyincrementaldemandfromnewsourcessuchaspassengercars,heatpumps,industrialmotors,andelectrolysers.By2030,elec-tricitycouldaccountforc.50%ofprimaryenergyconsumption,vs.c.20%today.Theurgencytoaccelerategreenenergyinvestment:Weestimatethatelectri-ﬁcationcouldrequireEuropetomobilise€3.7tnofcapitaloverthecomingnineyears,mostofwhichingreenenergyinfrastructure(morethanhalf).Powerpricestoshowmorenear-termresilience:Giventheconsistentclosureoflegacypowerplants,andtheexecutionrisksassociatedwithsmoothlyaccel-eratingwind/solaradditions,thesupply/demandbalanceofEuropeanpowermar-ketscouldtighten,supportinghigherpowerpricesto2025E(e.g.Germany).Solidreturns,double-digitgrowth,meaningfulupsidetointrinsicvalue:WebelievethisbackdropwillhavethreemainconsequencesfortheGreenEnergyMajors(GEMS):(1)muchhigherreturnsthanexpected(2)double-digitearningsgrowthto2027E,twicethelevelofthemarket;and(3)signiﬁcantintrinsicvaluecreation,evenassuminga50bpin-creaseinnominalWACC.AjayPatel+44207552-1168ajay.patel@gs.comGoldmanSachsInternationalMafaldaPombeiro+44207552-9425mafalda.pombeiro@gs.comGoldmanSachsInternationalAmishiGarodia+1212934-6393amishi.x.garodia@gs.comGoldmanSachsIndiaSPLSimonBergmann+44207552-8588simon.bergmann@gs.comGoldmanSachsInternationalMathieuPidoux+44207051-4752mathieu.pidoux@gs.comGoldmanSachsInternationalNote:ThefollowingisaredactedversionoftheoriginalreportpublishedJanuary24,2022[83pgs].ExecutiveSummaryWhileourpreviousresearchhasfocusedonthe2050netzeroendgame,hereweexploreamoreimmediate,moretangibletopic,onethatispoisedtorevolutionizeEuropeaneconomiesandoureverydaylives:theurgencyofelectriﬁcation.Latelastyear,theFitfor55plan(F55)anditsGermantranslationgaveusaglimpseofhowtheimmediatefuturemightlook–andthatis,muchmoreelectric.Infact,asstatedinF55,themosteffectivewayforEuropetoreacha55%reductioninemissionsby2030isthroughamajorelectriﬁcationprocess,aprocessthatisabouttostart.Webelievethatthiswillhavethreemainoutcomesforthesector:Powerdemandwillbegintogrow,strongly,invertinganear-15-yearnegativentrend.Weestimatea50%increaseinpowerconsumptionto2030.Bythen,electricitycouldrepresentc.50%oftotalEuropeanprimaryenergyconsumption,vsc.20%today.Europewillneedtomobilise€3.7tnofcapital,mostintogreenenergyninfrastructure,todeveloprenewables,upgradepowergrids,refurbishbuildingsandtosupporttheswitchtoelectricityformobility,realestateandmanufacturing.Powerpricestobetemporarilysupported,ascertainpowermarkets(e.g.,nGermany)arelikelytotightenoverthecoming3-5years,owingtotheextremelyrapidphaseoutofthermalplants(whichisunlikelytobefullyoffsetbythegradualaccelerationinRESadditions,untillaterinthedecade).24January20221GoldmanSachsUtilitiesandGreenEnergy24January20222GoldmanSachsUtilitiesandGreenEnergyTheriseofpowerinEuropeaneconomiesLatelastyear,theFitfor55plan(F55)anditsGermantranslationgaveusaglimpseofhowtheimmediatefuturemightlook.Infact,asstatedinF55,themosteffectivewayforEuropetoreacha55%reductioninemissionsby2030isthroughamajorelectriﬁcationprocess(automotive,realestate,manufacturing,greenhydrogen),aprocessthatisabouttostart.Asaresult,theshareofpowerintheprimaryenergymixinEuropecouldincreasetoc.50%,vs.c.20%today.Majorshiftinpowerdemand:50%increaseby2030ECurrently,Europeanpowerconsumptionisc.5%belowthe2008level.Onourestimates,theelectriﬁcationprocesscouldleadtoac.50%cumulativeincreaseinpowerdemandby2030,reversinganear-15-yearnegativetrend.Thiswouldbedrivenbyincrementalpowerdemandfromnewsources,suchaspassengercars,heatpumps,electricmotors,andelectrolyzers.Exhibit1:In2019,renewablesandnuclearaccountedforc.20%ofprimaryenergyinEuropePrimaryenergyconsumptionmixEurope,2019Exhibit2:By2030,electricity’sshare(nuclearandrenewables)ofprimaryenergycouldincreasetoc.50%,drivenbyelectriﬁcationPrimaryenergyconsumption,Europe2030ESource:OurWorldInData,BPWeassumegrowthisoffsetbyenergyefﬁciencymeasures,i.e.thattotalprimaryenergyin2030E=primaryenergyin2019Source:OurWorldInData,BP,GoldmanSachsGlobalInvestmentResearchAsasimpledemonstration,andtounderpinourestimate,wenotethatthepurchaseofanelectricvehicleandaheatpumpwouldmorethantriplethepowerconsumptionofatypicalEuropeanhousehold.Inotherwords,fullelectriﬁcationofmobilityandheatingwouldbroadlybeequivalenttotriplingEurope’spopulation.Exhibit3:Electriﬁcationcouldresultina50%cumulativesurgeinpowerdemandto2030EEuropeanpowerdemand-baselinenetenergyefﬁciencyvs.electriﬁcation(%CAGRto2030E)0.1%+1.8%+1.1%+1.2%+0.5%4.6%BaselinenetefficiencyHeatingMobilityIndustryElectrolysisElectrification+c.50%+c.1%Source:GoldmanSachsGlobalInvestmentResearchExhibit4:Foratypicalhousehold,acquiringanEVandinstallingaheatpumpwouldleadtoathree-foldincreaseinelectricityconsumptionHouseholdelectricityconsumption(MWh)3MWh10MWh+3MWh+4MWhConsumptiontypicalhouseholdElectricVehicleElectricHeatPumpNewconsumptionSource:GoldmanSachsGlobalInvestmentResearch24January20223GoldmanSachsUtilitiesandGreenEnergyTheurgencytoaccelerategreenenergyinvestmentMeetingtheFitfor55goalswouldrequirethemobilisationof€3.7tn,weestimate.Ofthis,weestimatemorethanhalf(c.€2.2tn)couldbeprivatelyfundedinvestment,carriedoutforthemostpartbygreenenergycompanies.Thisalonewouldimplyac.100%-200%incrementalEBITDAincreaseforourcoverageto2030Evs.2021(basedonourreturnsassumptions-seelater).Unprecedentedaccelerationinwind/solarannualcapacityadditions(Europe)Currently,about40%ofEuropeanpowerproductioncomesfromrenewablesources(hydro,wind,solar,biomassetc.);by2030,thissharecouldreach70%,accordingtotheFitfor55plan.TocomplywiththeF55planandtheresultingincreaseinpowerdemand,weestimatethatEuropemightexperienceaquadruplingofitsinstalledwindandsolarbase,andamajoraccelerationinannualinstallations(whichcouldpeakat150-200GWpainthesecondhalfofthedecade,vs.anaverageofc.20GWpain2016-20).Exhibit5:Fitfor55planimpliesc.€3.7tnofcapitalmobilisationby2030E,morethanhalfincleanenergyinvestmentsFitfor55mobilizedinvestmentsbreakdown(percentage)Renewables27%Transmissiongrids4%Distributiongrids14%Batteries2%Hydrogen5%EnergyEfficiency18%Mobility-cars18%Mobility-heavyduty4%Chargingpoints2%Heating6%CCS1%Privatelyfundedcleanenergyinvestmentsc.€2.2trnFitfor55€3.7trnSource:GoldmanSachsGlobalInvestmentResearch24January20224GoldmanSachsUtilitiesandGreenEnergyExhibit6:Bythesecondhalfofthedecade,weestimatethatEuropecouldreachpeakadditionsof150-200GWpaEUcapacityadditions(GW)c.20GWpac.130GWpac.150-200GWpa2016-202022E-30E2026E-30ESource:GoldmanSachsGlobalInvestmentResearch,ENTSO-EStatisticalFactsheetAsexplainedinourpreviousresearch,theprocessofscalinguprenewablesinvestmentsdoesnothappenovernight.Thetimeneededtoraisethenumberofpublicemployeesnecessarytosupporttheapprovalofpermits,todeveloplargerpipelines,andtoconvertthemintoactualassets,impliesalagbetweentheannouncementofnewpoliciesandtheachievementofpeakcapacitygrowth.ItisforthesereasonsthatwebelievethestepupinRESinvestmentswillbegradual,andthatgrowthwillcontinueacceleratinguntiltheendofthedecade.Thefollowingexhibitshowsourestimatesoftheannualcapexinwind/solar(€bn)necessaryforEuropetocomplywithitsFitfor55plan.Investments(atc.€25bnperyear,in2016-20,onaverage)couldreachapeakof€160bnpabytheendofthedecade.24January20225GoldmanSachsUtilitiesandGreenEnergyExhibit7:Annualinvestmentsinwind/solarcouldrisefromc.€25bnpain2016-20,toc.€160bnby2030EAnnualcapexinRES,Europe(€bn)2553676269861061391541571612016-202021E2022E2023E2024E2025E2026E2027E2028E2029E2030ESource:GoldmanSachsGlobalInvestmentResearchPowergridsneedacompleteoverhaulBy2030,theEUistargetinga50%reductioninemissionsfromroadtransport,anda50%shareofrenewablesbuildings(i.e.,buildingsheatedbycleanrces,suchasheatpumps).Thesetrends,coupledwiththerisingshareofRESinthesystem,wouldrequiregreaterinvestmentintheresilienceofpowernetworks,leadingtoamajordigitalisationpushinpowernetworks.Forpowerdistributioninparticular,thiscouldleadtotherolloutofsmartmeters,wallboxes,sensors,upgradestosubstations,moreadvancedtelecommunicationsystems,andnewsoftwaretohandlethemuchlargernumberofdatapointsgeneratedbysuchacomplexpowersystem.Thiscouldpushpowerdistributioninvestmentupbyc.60%vs.currentlevel.24January20226GoldmanSachsUtilitiesandGreenEnergyPowerpricestobetemporarilysupportedbythermalclosuresGiventheconsistentclosureoflegacypowerplants(weestimatethatby2025c.40%oftheEUcoal/ligniteﬂeetwillbedecommissioned)andtheexecutionriskassociatedwithsmoothlyacceleratingwind/solaradditions(supplychainconstraints,permittingdelays),thesupply-demandbalanceofEuropeanpowermarketscouldtightensigniﬁcantly,asdemonstratedbythesigniﬁcantcontractionintheEUreservemargin(theexcessof‘availablecapacity’overpeakdemand)inthefollowingexhibit.SuchS-Dtightnesscouldsupportpowerprices(andthermalspreads)until2025E.Exhibit8:Whenincludingdigitalisationinvestments,weestimateEuropeanpowerdistributionRABcouldgrowbyc.6.1%pato2030EuropeanRAB(€bn)348495628+316-205+35+199-66RAB2021CapexDepreciationInflationRAB2030DigitalisationCapexDigitalisationDepreciationRAB2030(afterdigitalisation)+6.1%pa+3.6%paSource:GoldmanSachsGlobalInvestmentResearch24January20227GoldmanSachsUtilitiesandGreenEnergyExhibit9:WeexpecttoseeareductionintheEuropeanresevemarginEuropereservemargin(%)7%3%-1%-6%-10%-12%-13%-15%-18%-20%2021E2022E2023E2024E2025E2026E2027E2028E2029E2030E24January20228GoldmanSachsUtilitiesandGreenEnergySource:GoldmanSachsGlobalInvestmentResearchWhyisn’tthespaceperformingyet?Followingthepublicationofour2022Outlookandconversationswithinvestors,wewouldcharacterizethemainconcernsovertheUtilitiesandGreenEnergyspaceasfollows:nInﬂation/rates:themajorityofconcernsrelatetotheexpectationofhigher-for-longerinﬂation,and(asaresult)thechancesoffurtherincreasesininterestrates.Thisshouldfavourindustrieswithpricingpower,orthosepositivelycorrelatedwithrates,suchasBanksorEnergyorMetals&Mining,forinstance.Additionally,risingratesshouldimplyahigherdiscountrate,whichisseenasameaningfulnegativeforcapital-intensive,long-durationactivitiessuchasrenewablesornetworks.Speciﬁctotheindustry,equipmentcostinﬂationhas(unjustly,asseveraldatapointscanprove,asdiscussedinpreviousreports)givenbirthtoworriesregardingapotentialcompressioninRESIRRs.nRegulatoryrisk:asexplainedinpreviousreports,thec.60%-80%increaseinenergybillsoverthepastyearhasincreasedthechancesofregulatoryinterventionagainstUtilitieswebelieve,asrecentlyseenforEDF,orasreportedbytheItalianpresswithregardtoEnel.Inourview,theabove-mentionedthreatsareconnected:higherenergypriceshavebeenakeydriverofhigherinﬂationrates,whichinturnhasincreasedexpectationsforhigherrates.Ifweweretoseeastabilizationincommodityprices,andifasaresultinﬂationratesstartedtonormalize(GSEconomists’centralcase),wecouldseeameaningfulrotationbackintoUtilities.Indeed,thechainreaction(lowercommodityprices,tolowerinﬂation,tolowerrates)wouldsimultaneouslyimplylessriskofregulatoryinterventionandlessconcernoverthecostofcapital.Exhibit10:Our2022EsectorframeworksummarisedEnergy/Rawmaterialpricesstabilisation,ordeclineLowerinterestratesexpectations:lessworriesonWACC123Easingconcernsoveraffordability:lowerregulatoryriskReducedconcernsoverequipment:betteroutlookonRESreturnsLowerinflationexpectationsSource:GoldmanSachsGlobalInvestmentResearch24January20229GoldmanSachsUtilitiesandGreenEnergyThemainfactorstomonitor...whichmayturnintobottlenecksWeidentifyseveralfactorsthatshouldallowforasmoothexecutionoftheEuropeanclimateplans,orthat–ifnotproperlyexecutedupon–couldnegativelyhitthewholenarrative:(i)stableregulationisimperativetoattracttrillionsofinvestmentsfromtheprivatesector:aprolongedenergycrisis(andasubsequentaffordabilitydebate)couldleadtounpredictableregulatorychanges,whichmightdelaygreeninvestmentplans;(ii)animprovementinadministrativeprocessesthatwouldallowforasmootherapprovalofprojects:permittinghassofarbeenakeybottleneck;(iii)mostofthesupplychainbottlenecksrelatetoshortagesintheworkforce:hiringmoreemployees(manufacturingandlogistics)andscaling-uptheirbusinesses,wouldallowthemtocopewithrisinginvestmentopportunities;and(iv)adeepeconomiccrisis–atsomestageoverthecomingnineyears–couldlowertheimpetusoftheseclimatepolicies,andslow-downthedecarbonisationpathofEurope.AmajorandimminentelectriﬁcationpushWhileourpreviousresearchhaslargelyfocusedonthe2050netzeroendgameandtherelatedaddressablemarket,wenowexploreamoreimmediateandtangibletopic,onethatispoisedtorevolutionizeEuropeaneconomiesandoureverydaylife:theurgencyofelectriﬁcation.Indeed,latelastyeartheFitfor55plan(F55)anditsGermantranslation,gaveusaglimpseoftheimmediatefutureandhowitwilllook–andthatis,muchmoreelectric.AsstatedinF55,themosteffectivewayforEuropetoreacha55%reductioninemissionsby2030isamajorelectriﬁcationprocess,onewhichisabouttostart.Thisshouldimpactotherindustries,suchasautomotive,realestate,manufacturing,andgreenhydrogen.TheEuropeanFitfor55plan:ThreemainpillarsTheFitfor55plan,disclosedinmid-Julylastyear,isacomprehensivedecarbonisationplanfortheEuropeanUnion.Goalsareexpressedfor2030,andinclude:(1)awiderdecarbonisationgoalthanbefore,withemissionstofalltoatleast55%below1990levels;(2)anambitiousmobilitygoalwhichimpliesatleasta50%reductioninroadtransportemissions;and(3)theachievementofa50%sharefor‘renewablesbuildings’.Exhibit11:TheFitfor55goalsimplyamajorelectriﬁcationpushthroughthefollowinggoals...2030goalsoftheFitfor55plan:Mobilitygoalthatimpliesatleast50%reductioninroadtransportemissionsAchievementofa50%shareinrenewablebuildingsDecarbonisationgoaltoreduceemissionsbyatleast55%below1990levelsSource:GoldmanSachsGlobalInvestmentResearchAtleasta55%reductioninemissionsEuropeangreenhousegasemissions(c.4gigatonnesin2019)caneasilybeclassiﬁedintoafewkeysegments(Exhibit12),withc.70%ofEUemissionsstemmingfrom:(1)thewayweproduceelectricity(powergeneration);(2)thewaywemovepeopleandgoodsaround(transport);(3)thewayweproducegoods(manufacturing);and(4)realestate(heatingspace).24January202210GoldmanSachsUtilitiesandGreenEnergyTheF55planistargetingan‘atleast55%’reductioninemissionsby2030,vs.1990.Sincethereferenceyear,emissionshavealreadyfallenbyc.25%,asseeninExhibit13;thisisequivalenttoac.1.2Gtreductioninabsolutetermssince1990.Toreachtheend-of-the-decadegoalsanincrementalc.1.4GtofCO2emissionswouldhavetoberemoved.Exhibit12:Powergeneration,transport,heatingandmanufacturingjointlyaccountforc.70%ofEuropeanemissionsEU-28greenhousegasemissions(mntonnesofCO2,2019)Source:Eurostat,GoldmanSachsGlobalInvestmentResearchExhibit13:Toreach2030goals,c.1.4GtofemissionswouldhavetoberemovedEU-27GHGemissionevolution(mtCO2e)1,5002,0002,5003,0003,5004,0004,5005,0001990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020E2021E2022E2023E2024E2025E2026E2027E2028E2029E2030EEU-27emissions2030F55Target:-55%-c.25%c.1.4GtofCO2needtoeliminatedtomeetF55targetsSource:EuropeanEnvironmentalAgency,GoldmanSachsGlobalInvestmentResearch24January202211GoldmanSachsUtilitiesandGreenEnergyNomorepollutingcombustioncarsalesby2035TheF55plantargetsac.50%reductioninemissionsfromroadtransport,implyingareductionofaboutc.0.5Gigatonsofemissions.BasedondatafromtheUnitedStatesEnvironmentalProtectionAgency(USEPA)thatsuggeststhatanaveragecombustionvehicleemitsc.250gramsofCO2perkm,weestimatethatF55targetswouldrequirec.100mnelectriccarsby2030.Intermsofpenetration,thiswouldresultinac.40%EVpenetrationbytheendofthedecadeasshowninExhibit14,substantiallyupfrom<1%today.Exhibit14:F55targetsimplyac.40%EVpenetrationinEuropeEVpenetrationinEuropeundertheF55plan0.2%4%7%11%14%17%21%24%28%31%35%38%20192020E2021E2022E2023E2024E2025E2026E2027E2028E2029E2030ESource:GoldmanSachsGlobalInvestmentResearchAnaverageelectricvehicleconsumesnearly3MWhofelectricityperyear,whichisequivalenttotheannualpowerconsumptionofatypicalhousehold,asshowninExhibit15.Webaseour3MWh/yearestimateforanaverageEVon:(1)powerconsumptionofc.0.18KWhperkm;and(2)distancetraveledof17kkmperyear.24January202212GoldmanSachsUtilitiesandGreenEnergyAbouthalfofrenewablebuildingsby2030Overthecourseofthelast10years,heatinghascontributedc.15%ofthetotalemissionsintheEU-28.Theelectriﬁcationofspaceheatingisoneofthelargestsourcesofupsideforpowerdemand.Forinstance,anaverageheatpumpneeds4MWhofpowerannually,morethantwicethepowerconsumptionneedsofatypicalEuropeanhousehold.Electriﬁcationofresidentialhouseholdsandservicebuildingshasthepotentialtoincreasepowerdemandbyc.15%vs.currentlevels,weestimate.Anaverageheatpumpconsumes4MWhofelectricityannually,whichisnearly135%morethantheaveragepowerconsumptionofatypicalhouseholdinEurope.This4MWhisestimatedfromaverageheatconsumptionneedsof12MWh/yearandaheatpump’selectricity-heatconversionrateof1:3.Exhibit15:EveryEVconsumespowerequivalenttoahouseholdinEuropeAnnualpowerconsumptionperunit2.9MWh3.0MWhElectricvehicleFamilyinEuropeSource:GoldmanSachsGlobalInvestmentResearch24January202213GoldmanSachsUtilitiesandGreenEnergyExhibit16:AheatpumpincreasestheannualpowerconsumptionofatypicalEuropeanhouseholdfrom3MWhto7MWhPowerdemand(TWh)3+47PowerdemandofatypicalfamilyUpsidefromaheatpumpPowerdemandofatypicalfamilyafterelectrificationofheating+c.135%Source:GoldmanSachsGlobalInvestmentResearchTheelectriﬁcationofmanufacturingOverthepastdecade,themanufacturingsectorhasemittedalittleoveraquarterofthetotalEU-28’semissions.Basedonourdivisionofsectors(Exhibit17),themanufacturingsectorcomprisesManufacturing/Materials,Reﬁning,Iron&Steel,WasteManagement,ChemicalsandSolidFuels.Currently,c.30%ofthissectoriselectriﬁed;reachingac.40%electriﬁcationratebytheendofthedecadewouldimplyc.15%upsideto2021’stotalpowerconsumption.24January202214GoldmanSachsUtilitiesandGreenEnergyExhibit17:Thecurrentrateofelectriﬁcationintheindustrialsectorstandsatonly30%CurrentrateofelectriﬁcationCurrentelectrificationrate0%10%20%30%40%50%60%70%80%90%100%TotalPaperFoodTransportEquipmentIron&SteelMachineryChemicalsNon-FerrousMetalsCementWoodTextilesCeramic&GlassSource:GoldmanSachsGlobalInvestmentResearch,WindEuropePowerconsumptiontoinﬂect:+50%to2030Onourestimates,theelectriﬁcationprocessthatissoontobekickedoffbytheF55plancouldleadtoac.50%cumulativeincreaseinpowerdemandto2030,reversinganear15-yearnegativetrend.Thisshouldbepossiblethankstoincrementalpowerdemandfromnewsources,suchaspassengercars,heatpumps,electricmotors,andelectrolyzers.Asaresult,electricitycouldbecomec.50%ofthetotalprimaryenergyconsumptionbythen,vs.c.20%today.Electricity:From20%to50%ofEuropeanprimaryenergyinlessthanadecadeCurrently(2019),about45%ofEuropeanpowerdemandcomesfromindustrialclients,whiletherestisbroadlyevenlysplit(c.30%each)betweenresidentialandservices.Powerconsumptionmostlycomesfrommanufacturingprocesses,cooling,lightingandelectricalappliances.DatafromBPshowsthat,currently(2019),electricityaccountsforabout20%ofprimaryenergy–thistreatsas‘electric’onlythosesourcesthatdonotrelyonfossilfuel,e.g.,nuclear,hydro,windandsolar(excludingotherrenewables).Onourestimates,toachievetheFitfor55planby2030,electricitywouldhavetobecomec.50%ofprimaryenergy.Exhibit18:c.45%ofpowerdemandinEuropein2019camefromindustrywhilec.30%camefromresidentialandservicesclientsEU-28powerdemandsplit(2019)Services28%Residential28%Industrial44%EU-28PowerDemand20192,900TWhSource:GoldmanSachsGlobalInvestmentResearch,Eurostat24January202215GoldmanSachsUtilitiesandGreenEnergyToreachtheaboveconclusion,wehavehadtoestimatetheevolutionofpowerdemand,underaFitfor55scenario,whichwedescribeintherestofthischapter.Powerconsumption:Statusquogrowthat“GDP-1%”Powerdemandbetween1990and2008increasedbylessthan1%pa,andpeakedin2008.Onacumulativebasis,powerdemandbetween2008and2019fellbyc.5%.Inotherwords,currently,powerdemandacrossEuropeisbelowits2008peakof>3,000TWh.Asobservedoverthepast30years,theongoingreductioninenergyintensitycouldleadtoarateofpowerdemandgrowthequivalenttoGDP-1%,inabusinessasusualExhibit19:In2019,renewablesandnuclearaccountedforc.20%ofprimaryenergyinEuropePrimaryenergyconsumptionmixEurope,2019Exhibit20:By2030,theelectricityshare(nuclearandrenewables)ofprimaryenergycouldincreasetoc.50%,drivenbyelectriﬁcationPrimaryEnergyConsumptionEurope2030ESource:OurWorldInData,BPWeassumegrowthisoffsetbyenergyefﬁciencymeasures,i.e.thattotalprimaryenergyin2030E=primaryenergyin2019Source:OurWorldInData,BP,GoldmanSachsGlobalInvestmentResearchExhibit21:TherecentpowerdemandtrendhasbeenunexcitingEU-28powerconsumption(TWh)20002400280032001990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192008levelsHistorically,powerdemandhasbeengrowingat"GDP-c.1%"Source:GoldmanSachsGlobalInvestmentResearch,Eurostat24January202216GoldmanSachsUtilitiesandGreenEnergyscenario.Adoptingaworkingassumptionofa2%paincreaseinGDP,wouldimplyameagre1%annualincreaseinpowerdemand,inabusinessasusualscenario.Ifwethenaccountforastepupinenergyefﬁciency(mosthomes/buildingsandfactoriescanachieveac.30%reductioninconsumptiononcethoroughlyrefurbished,perastudybytheUKgovernment),powerdemandwouldremainroughlyﬂatthroughtotheendofthedecade.Electriﬁcationtodrivesigniﬁcantupsidetopowerconsumption:+50%to2030Therecentlyunveiled2030decarbonisationgoalsoftheEU–atleasta55%reductioninemissionsvs.1990–implyanurgentneedtokickoffamajorelectriﬁcationpush,whichshouldsupportastrongaccelerationinpowerconsumption.Weestimatethatthegradualelectriﬁcationofheating,mobility,andfactories,coupledwiththegoalofdeveloping40GWelectrolysers,couldpotentiallysupportc.4.5%annualdemandgrowth,onacompoundbasis.Thisimpliesc.50%growthonacumulativebasisoverthe2021-30period.Exhibit22:PowerdemandnetofenergyefﬁciencywouldremainroughlyﬂatuntiltheendofthedecadeEuropeanpowerdemand-noactionbasecase,vs.energyefﬁciency(%CAGRto2030E)1%0.1%-0.9%BaselineincreaseEnergyefficiencyIncreasenetefficiencyWeassume20%forresidentialrefurbishments,35%forservicesrefurbishmentsand25%forindustrialrefurbishments.Wealsoassumec.30%savingsinconsumption,consistentwiththeanalysisbytheUKgovernmentin2018.Source:GoldmanSachsGlobalInvestmentResearch24January202217GoldmanSachsUtilitiesandGreenEnergyWedetailourassumptionssupportingthec.50%powerdemandupsidescenarioto2030below.Westressthat,outofprudence,ourassumptionsimplyalowerlevelofelectriﬁcationinheatingandmanufacturingthanthoseimpliedbythetargetsdetailedbytheEU:Heating.Ourestimateforheatingimpliesc.15%powerdemandupside(aCAGRofc.1.8%)vs.2021Epowerconsumptionlevels.Webasethisupsideonanassumptionthatc.25%ofresidentialhouseholdsandtwo-thirdsofservicebuildings,areelectriﬁedby2030(vs.c.10%andc.50%respectivelytoday).Ourassumptionsimplythatc.40%oftotalEuropeanrealestateiselectriﬁedby2030.Mobility.Ac.40%penetrationlevelforelectricvehiclestomeettheF55targetofhalvingroadtransportemissionswouldimplyc.100mnelectricvehiclesby2030,andbasedonanelectricvehicle’sannualconsumptionofc.3MWh/year,weestimatepotentialpowerconsumptionupsideofc.335TWhannually.Thisadditionalpowerconsumptionwouldresultinc.10%upside(aCAGRof1%)vs.2021E.Additionally,webaseour3MWh/yearestimateforanaverageEVon:(1)powerconsumptionofc.0.18KWhperkm;and(2)distancetraveledof17kkmperyear.Manufacturing.Weassumethattheelectriﬁcationrateforindustriesincreasesfromthecurrent30%to40%by2030,implyingpowerdemandupsideofc.15%vs.2021E.Hydrogen.Weassumepowerdemandupsideofc.7%(aCAGRof0.5%)vs.currentpowerconsumptionlevels,basedonastandardloadfactorof27.5%,appliedto80GWofrenewablescapacity(thecapacitythatwouldbeneededtorunthetargeted40GWofelectrolysers).Exhibit23:Electriﬁcationcouldresultina+50%cumulativesurgeinpowerdemandto2030EEuropeanpowerdemand-baselinenetenergyefﬁciencyvs.electriﬁcation(%CAGRto2030E)0.1%+1.8%+1.0%+1.2%+0.5%4.6%BaselinenetefficiencyHeatingMobilityIndustryElectrolysisElectrification+c.50%+c.1%Source:GoldmanSachsGlobalInvestmentResearch24January202218GoldmanSachsUtilitiesandGreenEnergyAsasimpledemonstration,andtounderpinourestimate,wenotethatthepurchaseofanelectricvehicleandaheatpumpwouldmorethantriplethepowerconsumptionofatypicalEuropeanhousehold.Inotherwords,fullelectriﬁcationofmobilityandheatingwouldbroadlybeequivalenttotriplingEurope’spopulation.Exhibit24:Developmentsneededby2030EtomeetF55planAbout2/3ofservicebuildingselectrifiedandmorethan1/3ofresidentialbuildingstobeelectrifiedHeatingc.40%penetrationofEVsMobilityc.50%ofmanufacturingtobeelectrifiedManufacturing40GWofelectrolysersrunwith80GWofrenewableswithaloadfactorof27.5%HydrogenDevelopmentsneededby2030EtomeetF55planSource:GoldmanSachsGlobalInvestmentResearchExhibit25:Foratypicalhousehold,acquiringanEVandinstallingaheatpumpwouldleadtoathree-foldincreaseinelectricityconsumptionHouseholdelectricityconsumption(MWh)3MWh10MWh+3MWh+4MWhConsumptiontypicalhouseholdElectricVehicleElectricHeatPumpNewconsumptionSource:GoldmanSachsGlobalInvestmentResearch24January202219GoldmanSachsUtilitiesandGreenEnergyCapitalmobilisationof€3.7tnby2030EMeetingtheFitfor55goalswouldrequirethemobilisationof€3.7tn,weestimate.Ofthis,about55%(c.€2.2tn)shouldbeprivatelyfundedinvestmentcarriedout,forthemostpart,byenergycompanies(UtilitiesandOils)-seelater.Thisdriveralonecouldimplyac.100%-200%EBITDAincreaseforourcoverageto2030E,vs.2021(basedoncurrentEBITDA/capexratios).Aboutc.€3.7tnofcapitaltobemobilisedto2030EOnourestimates,meetingtheFitfor55goalswouldrequirethemobilisationof€3.7tnofcapitalto2030.Thiswouldimplyanaveragec.€410bnperyearofcapitalbeingmobilisedthroughthisdecade.ThefollowingexhibitshowsthepotentialbreakdownofFitfor55investments.Privatelyfundedcleanenergyinvestments(c.55%)mostlyinrenewablesandnpowergridstosupporttherisingelectriﬁcationneedsoftheEuropeaneconomy.Energyefﬁciencyspending(c.25%)tolimittheconsumptionofenergyinhomes,nbuildingsandfactories–weestimateachievableenergysavingsofc.30%.Grants(c.20%)toswitchtoelectricmobility(e.g.subsidiestopurchaseaBEV)andnelectricheating(e.g.incentivestoinstallaheatpump).Exhibit26:TheFitfor55plancouldrequireac.€3.7tncapitalmobilisationby2030,morethanhalfofwhichcouldbeincleanenergyinvestmentsFitfor55mobilizedinvestmentsbreakdown(percentage)Renewables27%Transmissiongrids4%Distributiongrids14%Batteries2%Hydrogen5%EnergyEfficiency18%Mobility-cars18%Mobility-heavyduty4%Chargingpoints2%Heating6%CCS1%Privatelyfundedcleanenergyinvestmentsc.€2.2trnFitfor55€3.7trnSource:GoldmanSachsGlobalInvestmentResearchOur€3.7tnestimatefortheFitfor55goalsbuildsontheanalysiswehavepreviouslycarriedoutwhenlookingattheGreenDealandpotentialinvestmentsto2050.Weusethesameanalyticalapproach,amendingonlythetimeframeto2030.Ourestimatereﬂectsacombinationofassumptions:24January202220GoldmanSachsUtilitiesandGreenEnergyConsiderableupsidetosectorcapex,justfromEuropeWeestimatethatthrough2019-21,theUtilitiesinourcoverageinvestedatotalof€74bnpa.Ofthis,weestimatethatinvestmentsincleaninfrastructure(i.e.,networks,renewables)accountedfornearly75%.Weestimatethatc.€2.2tnofFitfor55mobilizedinvestmentsinEuropeto2030(cumulative)willbeprivatelyfunded,equivalenttoc.€200bnperyear.Dependingontheirmarketshares,Utilitiescouldpotentiallyseec.150%-300%upsidetotheirannualcapex.Exhibit27:Overthelastthreeyears,weestimatethattheUtilitiesinourcoveragehaveinvestedc.€74bnpa;cleaninfrastructureinvestmentsaccountedforc.75%ofthetotalEuropeanUtilitiesinourcoverage;averageannualcapexbreakdown,2019-21(€bn,percentage)€31bn€23bn€21bn€74bnNetworksRenewablesOtherTotalCapexAverage2019-21Cleaninfrastructurecapexshareatc.75%Source:Companydata,GoldmanSachsGlobalInvestmentResearch24January202221GoldmanSachsUtilitiesandGreenEnergyOurmethodologytoreachour€3.7tnestimateRenewables:weassume700GWofcumulativeadditionsover2022-30,todelivernnearly70%ofoutputfromRESbytheendofthedecade,aspertheEUF55plan.T&D:weassumeac.50%accelerationinpowernetworksinvestments,todigitalisenthegridandimproveresilience.Mobility:weassumenearly€5kaveragesubsidiespercar,asanincentivetontransitiontoanEV,andassumethatthepricegapbetweencombustionandelectric/hydrogenbuseswillalsobesubsidised.OurestimateonchargingpointsisconsistentwiththeIEA’sexpectations.Hydrogen:weassume40GWofeletrolysersaredevelopedby2030,consistentnwithEUtargets.Batteries:weassumethatbatterieswillrepresentc.15%of2030REScapacity.ThisnissimilartotargetsseeninCaliforniaandSpain.Energyefﬁciency:weestimateinsulationcosts,assumingaroundone-thirdofnbuildingswillbeundergoinginsulationby2030.Heating:weassumethatthecosttoinstallaheatpumpandupgradetheheatingnsystem(c.€5k)willbesubsidised.Exhibit28:Fitfor55mobilizedinvestmentscouldleadtoc.160%-320%capexupsidefortheUtilitiesinourcoverage,vs.currentlevelsEUUtilities;annualcapeximpliedbyFitfor55indifferentscenarios(€bnpa)€74bn€120bn€180bn€239bnEUUtilitiesCapexAverage2019-2150%MarketShareScenario75%MarketShareScenario100%MarketShareScenario+c.160%+c.240%+c.320%Source:GoldmanSachsGlobalInvestmentResearch24January202222GoldmanSachsUtilitiesandGreenEnergyImminent,strongaccelerationinwind/solaradditionsCurrently,about40%ofEuropeanpowerproductioncomesfromrenewablesources(hydro,wind,solar,biomass,other);by2030,thissharecouldreach70%,accordingtotheFitfor55plan.Asweexpectpowerdemandtogrowbynearly50%tothen,thisimpliesaquadruplingofthewindandsolarinstalledbase,andamajoraccelerationinannualinstallations(whichcouldpeakat150-200GWpainthesecondhalfofthedecade,vsc.20GWpatoday).Quadruplingcapacityby2030impliesaten-foldaccelerationinadditionsvs.2016-20annuallevelsIn2000,onlyc.15%ofpowerproductioncamefromRES,mostlyhydro.Sincethen,acombinationofsupportivepoliciesandamajorimprovementineconomicshasledtoasteadyriseintheshareofRES.Presently(2021E),about40%ofEuropeanpowerproductionisfromrenewablesources.Exhibit29:TheEUhaswitnessedasteadyriseinRESpowerproductionEU-27generationmix32%29%25%30%24%13%12%20%20%7%3%2%14%13%13%5%5%14%4%6%100%100%100%200020102020NuclearCoalGasOilOthernon-RESHydroSolarWindOtherRESc.15%c.25%c.40%Source:Eurostat,GoldmanSachsGlobalInvestmentResearchBy2030,webelievetheshareofRESinthepowermixcouldpotentiallyreach70%inEurope,iftheFitfor55planweretobefullydelivered.Thiswouldbetheresultofwind/solaradditions(Exhibit30)tomeetac.40%increaseinpowerdemand,andtheongoingclosureofthermalplants.24January202223GoldmanSachsUtilitiesandGreenEnergyWhencomparedto2016-20averageannualadditionsofc.20GWpa,weestimatethatthisplanwouldrequirec.130GWofwind/solaradditionspa.Critically,wedonotbelievethatEuropewillbeginaddingmorethan100GWintheimmediatefuture,aspriortoupgradingwithRESadditions,companieswouldhaveto:(1)scoutforandleasenewland;(2)completethepermittingphase;(3)wincapacityauctionsorsignPPAagreements;(4)contractequipmentandreachagreementswithotherproviders(shipping,civilworks,etc.),(5)constructtheassets;and(6)scaleupoftheirworkforcestocopewithhighervolumesofcapacityadditions.Thisiswhyweanticipateasteadyaccelerationincapacityadditions,whichcouldpeakinthesecondhalfofthedecadeat150-200GWpa.Exhibit30:REScapacityadditionsneededoverthenextdecadetomeetFitfor55goals(70%productionfromRES)REScapacityadditions193GW317GW510GW25GW167GW192GW156GW686GW842GW375GW1544GW2021EOnshoreadditionsOffshoreadditionsSolaradditions2030EOnshoreOffshoreSolarc.35GWpac.20GWpac.75GWpaSource:GoldmanSachsGlobalInvestmentResearch24January202224GoldmanSachsUtilitiesandGreenEnergyTop-down.Anyregionseekingtoacceleratethedevelopmentofrenewablesnrequires:(1)astableandpredictableregulatorybackdrop,toattractmoreprivatecapitalandsupportthecreditmarket’spropensitytolendmoneytotheseprojects;(2)anincreaseincivilservantsandthesimpliﬁcationofthepermittingphase,toallowcentral/localadministrationstodealwiththegreaternumberofrequests.Bottom-up.Besidesﬁnancialheadroom(ortheabilitytoraiseequity),toscaleupnRESactivitiescompaniesneedproperprocessesinplace.Forinstance,Iberdrolaiscurrentlydevelopingatc.55differentconstructionsitesaroundtheworld.Corporateswouldrequireadditionalskilledworkers(ortheabilitytotrainunskilledones)inbusinessdevelopment,toscaleupthesizeoftheprojectpipeline–anecdotalevidenceinonshorewindandsolarsuggestsuptoﬁveyearstomeaningfullydosoorganically(securelandleases,carryoutfeasibilitystudies,obtainpermits).Additionally,companieswouldhavetowinmoreauctions,andcontractmoreworkerstooverseeandcarryouttheconstruction/installationphase(thoughthisismostlyoutsourced).ItisforthesereasonsthatwebelievethestepupinRESinvestmentswillbegradual,andwillcontinueacceleratinguntiltheendofthedecade.Thefollowingexhibitshowsourestimateoftheannualcapexinwind/solar(€bn)neededforEuropetocomplywithitsFitfor55plan.Investments(atc.€25bnpaonaveragein2016-20)couldpeakat€160Exhibit31:Bythesecondhalfofthedecade,weestimatethatEuropecouldreachpeakadditionsof150-200GWpaEUcapacityadditions(GW)c.20GWpac.130GWpac.150-200GWpa2016-202022E-30E2026E-30ESource:GoldmanSachsGlobalInvestmentResearch,ENTSO-EStatisticalFactsheetREScapexaccelerationmaypeakatmorethan€150bnperyearAsexplainedinourpreviousresearchtheprocessofscalinguprenewablesinvestmentsdoesnottakeplaceovernight.Here,wedescribethestepsneeded(fromaregulatoryperspectiveandfromacompany’spointofview)toacceleratethedevelopmentofRES.24January202225GoldmanSachsUtilitiesandGreenEnergybnpa,bytheendofthedecade.Evidenceshowingthattheprocessisalreadyinmotion:GermanyandItalyTheclimateplanpresentedlatelastyearbyGermanysuggestsannualRESadditionsofc.20GWpa,onaverage,between2022and2030.Thiscompareswithrecentannualadditionsof6GWpa.InItaly,annualRESadditionsaretargetedat8GWpa,whichcompareswiththeaverage0.8GWpainrecenthistory.Exhibit32:Annualinvestmentsinwind/solarcouldmovefromc.€25bnpain2016-20,toc.€160bnby2030AnnualcapexinRES,Europe(€bn)2553676269861061391541571612016-202021E2022E2023E2024E2025E2026E2027E2028E2029E2030ESource:GoldmanSachsGlobalInvestmentResearchExhibit33:TheGermancoalitionagreementimpliesa>3xaccelerationinrenewableadditionsin2022-30E(vs.2018-20)RenewableadditionsinGermany(GW)Exhibit34:Italy’srenewabletargetsimplya10-foldincreaseinaverageadditionsin2022-30E(vs.2018-20)RenewableadditionsinItaly(GW)6GW20GW2018-202022-30E>3x0.8GW8.0GW2018-202022-30E10xSource:IRENA,SPD,GoldmanSachsGlobalInvestmentResearchSource:Irena,GoldmanSachsGlobalInvestmentResearch24January202226GoldmanSachsUtilitiesandGreenEnergyPowergridsneedacompleteoverhaul:+6%RABgrowthpaTheelectriﬁcationprocesstargetedbytheEuropeanUnionwouldtransformmobility,heatingand(insmallerpart)manufacturing.By2030,theEUistargetinga50%reductioninemissionsfromroadtransportanda50%shareofrenewablesbuildings.Thesetrends,coupledwiththerisingshareofRESinthesystemwouldrequiregreaterinvestmentintheresilienceofpowernetworks,andcouldleadtoamajordigitalisationpushinthesepowernetworks.Regardingpowerdistributioninparticular,thiscouldleadtoa>60%accelerationincapexthroughtherolloutofsmartmeters,wallboxes,sensors,upgradestosubstations,moreadvancedtelecommunicationsystems,andnewsoftwaretohandlethemuchlargernumberofdatapointsgeneratedbysuchacomplexpowersystem.Digitalisingpowerdistributioncouldcostnearly€200bnCurrentinvestmentsinpowerdistributionamounttoc.€30bnpa,whichweestimatewillacceleratetoc.€40bnpaby2030,basedonanannualaccelerationof1.75%-2%inabusinessasusualscenario.Weestimatec.€200bnoftotalinvestmentswouldbeneededtodigitalisethepowerdistributiongrid,asshownbelow.Webaseourestimatesoncostsof€100persmartmeter,€280perhouseupgrade,€200persoftwareupgradeand€500perwallbox(consistentwithindustryestimates).Additionally,toestimatestorage,weassumeunitarycostsof€990/kW,againconsistentwithindustryestimates.Exhibit35:Adigitilisationpushwouldneed...GridsdigitalisationSmartmetersWallboxesSensorsSubstationupgradesNewsoftwareNewTelecomsystemSource:GoldmanSachsGlobalInvestmentResearch24January202227GoldmanSachsUtilitiesandGreenEnergyDistributionRABcouldgrowbyc.6%pato2030Currently,EuropeanpowerdistributionRABisc.€350bn,weestimate.Basedontheabove-describedinvestments,andassumingthathalfofregimesarestructuredonarealbasis(i.e.,RABanddepreciationarebothinﬂatedannually)whilehalfarenominal,weestimatethatEuropeanpowerdistributionRABcouldgrowbyc.6%pato2030.Weassume100%implementationofthedigitalisationinvestmentsdiscussedaboveinthisanalysis.Additionally,wedepreciatedigitalisationcapexover15yearswhiletheremainingcapexisdepreciatedover40years.Exhibit36:Totalcapexupgradefromdigitalisation:c.€200bnEuropedistributiondigitilisationcapex,2022-30E(€bn)19920101439117SmartmetersWallboxesHouseupgradesSoftware/hardwareupgradesStorageTotaldigitalisationcapex,2021-30ESource:GoldmanSachsGlobalInvestmentResearch24January202228GoldmanSachsUtilitiesandGreenEnergyExhibit37:Includingdigitalisationinvestments,weestimateEuropeanpowerdistributionRABcouldgrowbyc.6.1%pato2030EuropeanRAB(€bn)348495628+316-205+35+199-66RAB2021CapexDepreciationInflationRAB2030DigitalisationCapexDigitalisationDepreciationRAB2030(afterdigitalisation)+6.1%pa+3.6%paSource:GoldmanSachsGlobalInvestmentResearch24January202229GoldmanSachsUtilitiesandGreenEnergyPowerpricestemporarilysupportedbythermalclosuresGiventheconsistentclosureoflegacypowerplants(weestimatethatby2025c.40%oftheEUcoal/ligniteﬂeetwillbedecommissioned)andtheexecutionriskassociatedwithsmoothlyacceleratingwind/solaradditions(supplychainconstraints,permittingdelays),thesupply-demandbalanceofEuropeanpowermarketscouldtightensigniﬁcantly.Thiscouldsupportpowerpricesto2025E,andtemporarilydelayasupply-leddecline(arisingshareofcheaprenewables),whichwehavedescribedinourpreviousresearch.About40%ofcoalandligniteplantsshouldbedecommissionedby2025Asseeninthefollowingexhibit,by2030webelievethatEuropecoulddecommissionc.60GWofcoalandlignitepowerplants.Weexpecttheclosureoftheseplantstobefront-loaded:by2025,about40%oftheEuropeancoal/ligniteﬂeetwillbeshut,weestimate.Reservemarginstoturnnegativeasearlyasnextyear:aneedtobuildmuchmoreIfwealsoaccountfortheclosureofnuclearplants(nearly20GWby2025E),andfortheavailabilitygapbetweenthermalplantsandrenewables,wewouldexpecttoseeamajorreductionintheEuropeanreservemargin,whichmeasuresthespreadbetweenavailability-adjustedcapacityandpeakpowerdemand.Exhibit38:Between2022and2030,weforecastc.60GWofthermalplantclosuresThermalclosureinEU-2.2GW-1.7GW-1.1GW-1.7GW-2.1GW-2.4GW-2.6GW-2.1GW-2.4GW-7.2GW-8.1GW-8.3GW-3.0GW-2.0GW-2.0GW-2.5GW-2.5GW-5.6GW-9.4GW-9.8GW-9.4GW-4.7GW-4.2GW-4.5GW-5.2GW-4.6GW-8.0GW2022E2023E2024E2025E2026E2027E2028E2029E2030ELigniteclosureCoalclosureSource:GoldmanSachsGlobalInvestmentResearch24January202230GoldmanSachsUtilitiesandGreenEnergyThissuggestsanurgentneedtoinvestinstorage,andinnew,gas-ﬁred(orhydrogen-ready)turbineplants.WeestimatethatEuropemayneed100-150GWofgas/hydrogenbackupplantsby2030.SparkspreadscouldexpandfurtherSparkspreadsmeasuretheunitarygrossmarginofagasplant;althoughthisisapoorproxyfortheproﬁtabilityoftheseplants,theirevolutionisanimportantdriveroftheevolutionofpowerprices.ThefollowingexhibitshowstheevolutionofsparkspreadsinGermanysince2011,whichhavebeenclosetozero.However,intimesoftightness(powermarketshavebeeninoversupplysince2009)spreadsbegintoexpand,andcansettleat€10-20/MWh,aswasseenintheItalianmarketintheearly2000s.Exhibit39:WeexpecttoseeareductionintheEuropeanresevemarginEuropereservemargin(%)7%3%-1%-6%-10%-12%-13%-15%-18%-20%2021E2022E2023E2024E2025E2026E2027E2028E2029E2030ESource:GoldmanSachsGlobalInvestmentResearchExhibit40:Thereisanurgentneedtoinvestinnew,gas-ﬁredturbineplantsWeestimatethatEuropemayneed100-150GWofgas/hydrogenbackupplantsby2030Urgentneedtoinvestinnewgas-firedplants..Source:GoldmanSachsGlobalInvestmentResearch24January202231GoldmanSachsUtilitiesandGreenEnergyExhibit41:SparkspreadsinGermanycouldgofromzeroinrecenthistoryto€10-20/MWhconsistentlyGermany1-yearforwardsparksprad(€/MWh)-20-15-10-505101520201020112012201320142015201620172018201920202021Source:GoldmanSachsGlobalInvestmentResearch,Bloomberg24January202232GoldmanSachsUtilitiesandGreenEnergyAppendix:Affordability–movingincentivesdownstreamDuring2021,theincreaseingasandCO2pricesledtoanunprecedentedincreaseinpowerprices,andinturntoac.60%-80%increaseinelectricityandgasbillsinEurope.Theimpactthatthiswillhaveonfamilies(ac.€900paincreaseinenergybills)hasledtoanintensefocusonaffordability.Wedrawthreekeyconclusions:(1)theincreaseingaspricesappearsunsustainable:current1-yearforwardcurvesareaboutsixtimeshigherthantheaveragegaspriceofthepast15years;(2)asnotedearlier,attractiveRESeconomicssuggestthat,overthelongerrun,arisingshareofwind/solarwillplacesteadydeﬂationarypressureonpowerpricesandthereforeelectricitybills;and(3)through2000-2015,Europehasencouragedthedevelopmentofrenewableswithincentives.Webelievethatincentiveswillnowmovefromupstream(wind,solar)todownstream(families),tostimulateswitchingtoelectriccars,and/ortoheatpumps.Wemostlyfocusonthislastaspectofaffordability,andshowthatthepaybackperiodonthesenewincentivescouldbeveryrapid(3.5years)andhighlybeneﬁcialtofamilies,potentiallyallowingsavingsofc.50%onenergybills(gas,power)andfuelcosts(petrol/diesel).TherecentsurgeinpowerpriceshassparkedamajordebateoveraffordabilityDuring2021,gaspricesrosemorethanﬁve-fold,onthebackofapick-upindemandandconsistentwiththegasprice’scorrelationwithoilprices.Similarly,carbonpricesnearlytripled,onthebackofatightersupply/demandbalance,inducedbythemarketstabilityreserveandbytheexpectationoffurthermarketreforms,asdetailedinourrecentreport.ThisunprecedentedincreaseincommoditypricesledtoasigniﬁcantincreaseinpowerpricesinalmosteveryEuropeanmarket.ThefollowingexhibitshowsthatItalianpowerpricesareupbyc.350%fromthestartof2021.Exhibit42:Gaspriceshaverisenc.450%sincethebeginningof2021TTF1-yearforwardevolution,YTD(€/MWh,percentage)Exhibit43:Carbonpriceshaverisenc.170%sincethebeginningof2021CarbonETSevolutionYTD(€/tonne,percentage)5152535455565758595Jan-21Mar-21May-21Jul-21Sep-21Nov-21Gaspricesareup+c.450%YTD152535455565758595Jan-21Mar-21May-21Jul-21Sep-21Nov-21CO2pricesareup+c.170%YTDSource:Bloomberg,GoldmanSachsGlobalInvestmentResearchSource:Bloomberg,GoldmanSachsGlobalInvestmentResearch24January202233GoldmanSachsUtilitiesandGreenEnergyUsingItalyasacasestudy,wecanseethat,untilrecently,energybillsforhouseholdshadremainedbroadlyﬂatsince2010-12.However,whileelectricitybillsin2020werebroadlysimilartolevelspaidbyconsumersin2010-11,sincethe3Qtrough,electricitybillshavespikedby80%.Asforgasbills(whichhadbeensteadilydecliningsinceearly2013),injustoverayear,theyhavespikedbyc.60%.Weestimatethattherecentc.60%-80%increaseinpowerandgasbills,foraveragehouseholds(consumingc.3MWhofelectricityandc.1,400cubicmetersofgasperyear),couldleadtoac.€900increaseinannualbills,or>€100/monthinwinter.Exhibit44:Italianpowerpricesareupc.350%year-to-date,duetotheriseincommoditypricesItalian1-yearforwardpowerpriceevolution,YTD(€/MWh,percentage)2575125175225275Jan-21Mar-21May-21Jul-21Sep-21Nov-21Italianpowerpricesareup+c.350%YTDSource:Bloomberg,GoldmanSachsGlobalInvestmentResearchExhibit45:Powerbillswerebroadlyﬂatfrom2010,thensawan80%spikefrom3Q2020Italyelectricityhouseholdbillevolution(€/MWh)Exhibit46:Gasbillsfellbyc.35%between2012-13and3Q2020,andthenspikedbyc.60%Italyhouseholdsgasbillsevolution(€/m3)100120140160180200220240260280300320201020112012201320142015201620172018201920202021Flatpowerbillsbetween2010-3Q2020,then+80%spike5560657075808590951001052012201320142015201620172018201920202021c.35%dropingasbillsuntil3Q2020,then+60%spikeSource:GoldmanSachsGlobalInvestmentResearch,AreraSource:GoldmanSachsGlobalInvestmentResearch,Arera24January202234GoldmanSachsUtilitiesandGreenEnergyElectriﬁcationcouldsavemorethan€2,000peryear,perhouseholdFor2021,weestimatethatatypicalhousehold(webaseourcalculationsonatypicalItalianfamily,usingofﬁcialtariffsdisclosedbytheregulator,Arera)wouldincurenergybillsofnearly€4,700,orc.€390/month,toreﬂectthreemaincostitems.Electricity.Electricitycostsrepresentabout20%oftheannualenergycostsn(c.€890/year),andmostlyreﬂectthecostsoflightingandappliancesinatypicalhouseholdconsuming3MWhperyear.Gas.GasbillsinItalyrepresentabout30%oftotalenergycosts(c.€1,400/year),andnaretheresultoftheheavyutilisationofgasforheatingresidentialhomesduringwinter.Petrol/diesel.Fuelforpassengercars(atypicalhouseholdowns1.5cars)nrepresentsc.50%ofannualenergycostsforastandardhousehold,orc.€2,700/yearatthecurrentlevelofpetrol.WebelievethatinanElectriﬁcationscenario(onewithcarbon-freepowergeneration,Exhibit47:Energybillscouldincreasebyc.€900forhouseholdsandby>€100/monthduringwintertimeEnergybillsincreasebreakdown(€permonthandperyear)AnnualizedcostMonthly,inwinterPower:3Q202049852Power:Winter202189193Powerbillsincrease39341Gas:3Q2020843112Gas:Winter20211,356181Gasbillsincrease51368Energy(power+gas):3Q20201,341164Energy(gas+power):Winter20212,247274Energybillsincrease905109Source:GoldmanSachsGlobalInvestmentResearch,AreraExhibit47:Weestimatethathouseholdsspendnearly€4,700peryearonenergybills,withthebulkofitcomingfrompetrol/dieselTypicalhouseholdenergybillbreakdownbysource,2021(percentage)Electricity19%Gas28%Petrol/Diesel53%Householdenergybillc.€4,700/yearSource:GoldmanSachsGlobalInvestmentResearch24January202235GoldmanSachsUtilitiesandGreenEnergytheelectriﬁcationofheating,andswitchingtoelectricvehicles)consumerscouldsavenearlyc.€2,100paby2030,vs.currentbills,andc.€2,400pavs.abusinessasusual2050forecast.Putanotherway,thisprocesscouldleadtoac.50%reductioninenergybillsforEuropeanfamilies,mostlyowingtosavingsinheatingandpetrolexpenditure.Lowerpowerprices,owingtotherisingshareofrenewablesandthenormalisationincommodityprices,completethepicture.However,toachievethesesavings,weestimatethathouseholdswouldhavetospendc.€7,000inup-frontcapitalcosts.Capitalcostswouldmostlyfundhouserecabling(ashouseholdsintensifytheirelectricityconsumptionowingtoelectriﬁcation,houseelectricitycableswillneedanincreaseinvoltagecapacityfromc.3kWtoc.9kW),thepurchaseofanelectricvehicle,andtheinstallationofanewheatingsystemrelyingonheatpumps.Exhibit48:TheElectriﬁcationprocesscouldleadtoc.50%annualsavingsinenergycostsforatypicalhousehold,morethanc.€2,000peryearTypicalhouseholdenergybillevolutionindifferentscenarios(€year)EnergyBills(€/year)NoNetZeroNetZeroNoNetZeroNetZeroNoNetZeroNetZeroElectricity€891€891€665€677€788€1,052Gas/HeatPump€1,356€1,356€1,054€602€1,419€637Petrol/Diesel/EVs€2,498€2,498€2,259€596€2,757€815Total€4,745€4,745€3,977€1,875€4,963€2,5032021E2030E2050ESavingsc.50%c.€2,100/yearSavingsc.50%c.2,400/yearSource:GoldmanSachsGlobalInvestmentResearchExhibit49:Theup-frontinvestmentsinhouserecabling,HPsandBEVsmighttotalc.€7,000forahousehold,weestimateUpfrontcostsforelectriﬁcationperhousehold,breakdownbysource(€)4204,4042,3647,188HouserecablingHeatPumps(e-Heating)ElectricVehicleSubsidiesneededSource:GoldmanSachsGlobalInvestmentResearch24January202236GoldmanSachsUtilitiesandGreenEnergyTimeforincentivestomovefromupstreamtodownstreamBetween2000and2015,Europebuiltarenewablesindustrybasedonincentives.However,theelectricityproducedfromRESwasexpensiveatthattime,andbecameaburdenforconsumers.Germanyisthemostextremecase,asRESsubsidiescurrentlyaccountforc.20%-25%ofend-userbills.However,followingamaterialcostreductioninrenewablescosts–windandsolarcostshavedroppedby60%and80%respectivelyoverthepast10years–arisingshareofRESinthesupplycurveshouldproveadeﬂationaryforceforpowermarkets,asincentivesbecomelessandlessnecessary.ThefollowingexhibitshowsthattheLCOEsofwindandsolararenowwellbelowthecashcostsofthermalplants,andareevenlowerthanthereplacementcostsoflegacygenerationassets.Withthepowersystemupstreamrelyinglessonincentives,thiscouldfreeupfundsforsubsidiesinthedownstream,toincentivizeachangeinconsumerbehaviors.Asstatedabove,weestimateup-frontcostsfortheelectriﬁcationprocessforhouseholdsatc.€7,000,asigniﬁcantamountforthemajorityoffamilies.Ifthesecostsweretobecoveredbystate-incentives(nearly€1.6tnto2050,orabout€50bnperyearforEuropewouldberequired),thesavingsinenergybillswould“repay”up-frontcostsinlessthanfouryears.WebelievethispolicywouldallowEuropetotakeasigniﬁcantstepinachievingitsdecarbonisationgoals.Exhibit50:RenewabletechnologiesarenowsigniﬁcantlycheaperthanthermalplantsandcheaperthanthereplacementcostsoflegacygenerationassetsLCOEsofdifferenttechnologies(2022E,€/MWh)14814814822187231142363463532122021899070604229OCGTCCGTCCGTwithCCUSNuclearHydroOffshoreOnshoreSolarFuel&CarbonO&MCapitalCostsSource:GoldmanSachsGlobalInvestmentResearch24January202237GoldmanSachsUtilitiesandGreenEnergyExhibit51:PaybackperiodforgrantsforatypicalhouseholdwouldbelessthanfouryearsPaybackperiodoflessthanfouryearsImplicationofcarbon-freepowergeneration,electrificationofheating,switchingtoEVs:c.€2,300pasavingsforconsumersonannualrunningcostsc.50%reductioninenergybillsc.€7,000capitalcostperhouseholdtoreachNetZeroSource:GoldmanSachsGlobalInvestmentResearch24January202238GoldmanSachsUtilitiesandGreenEnergyAppendix:AglanceattheglobalRESmarketAsdiscussedinpreviousresearch,datafromtheIEAsuggeststhat,toreachnetzero,globalcleanenergyinvestments(atc.US$1,230bnin2020)wouldhavetoacceleratetomorethanUS$4tnpaby2030.Weestimatethatwindandsolaradditions(Globalex-China)couldacceleratetoc.700GWpa(c.7xthecurrentrate)through2031-50,whichcompareswithc.100GWpacurrently,andpotentially225GWpathroughoutthisdecade.Exhibit52:Toreachnetzero,cleanenergyinvestmentswouldhavetosurgetomorethanUS$4tn(vs.c.US$1tntoday),perIEAestimatesGlobalcleanenergyinvestments(US$bn),netzeroscenario3881584312883534165851991,2344,1252016-202030ElectricitygenerationEnergyinfrastructureEnd-useLow-emissionsfuelsc.3.5xSource:IEA,GoldmanSachsGlobalInvestmentResearch24January202239GoldmanSachsUtilitiesandGreenEnergyThiswouldbringthetotalrenewablecapacitytonearly17,000GWby2050,vs.onlyc.800GWtoday.Exhibit53:Weexpectc.700GWwind/solaradditionsannuallyin2031-50EGlobal(ex-China)capacityadditions(GW)69GW118GW370GW34GW107GW321GW102GW225GW690GWCurrent2021-30E2031-50ESolarPVWindc.2xc.3xCurrent:2019Source:IEA,GoldmanSachsGlobalInvestmentResearchExhibit54:Weexpectac.4xincreaseintherenewablebaseby2030E,andac.20xincreaseby2050EGlobal(ex-China)installedwind/solarcapacity(GW)3821,6149,0084131,5337,9467953,14716,954Current2030E2050ESolarPVWindc.4x>5xCurrent:2019Source:IEA,GoldmanSachsGlobalInvestmentResearch24January202240GoldmanSachsUtilitiesandGreenEnergyAppendix:TheLTdeﬂationarytrendinRESactivitiesSince2010,thelevelisedcostofproducingelectricity(LCOE)fromonshorewindandsolarhasfallen,respectively,by60%and80%,asseeninthefollowingexhibits.Thecostofoffshorewindalsofellbyc.80%overthesametimeframe.Thispronouncedimprovementintheeconomicsofwindandsolarwasakeyfactorintheaccelerationofglobalinstallations.AttractiveeconomicsalsoexplainwhysolarPVgainedmarketsharewithintheEuropeanRESmix.Thefollowingexhibitshowstherisingshareofsolar(expressedasapercentageofthetotalRESinstalledbase)since2000.Asseenabove,theLCOEofwindandsolariswellbelowtheprevailingpowerforwardcurvesacrossEurope.Thus,addingrenewableswould‘ﬂatten’thesupplycurve,increasetheshareofcheaperpowergenerationsourcesand,asaresult,putdownwardpressureonpowerprices.Exhibit55:Therehasbeenapronouncedimprovementintheeconomicsofwind...OnshoreLCOE(€/MWh)Exhibit56:...andsolar,andthispromotestheaccelerationofglobalinstallationsSolarLCOE(€/MWh)2040608010012014020082009201020112012201320142015201620172018201920202021E2022E2023E2024E2025E2026E2027E2028E2029E2030ESpain2022FwdOnshoreLCOE(atWACC+200bp)02040608010012014020102011201220132014201520162017201820192020Spain2022FwdSolarLCOE(atWACC+200bp)Source:GoldmanSachsGlobalInvestmentResearchSource:GoldmanSachsGlobalInvestmentResearchExhibit57:Overthelasttwodecades,solar’sshareofthetotalinstalledRESbasehasincreasedEURESinstalledcapacityHydro86%SolarPV0%OtherRES6%Wind8%2000c.160GWHydro51%SolarPV10%OtherRES10%Wind29%2010c.290GWHydro28%SolarPV26%OtherRES9%Wind37%2020c.550GWSource:GoldmanSachsGlobalInvestmentResearch,IEA24January202241GoldmanSachsUtilitiesandGreenEnergyExhibit58:Currently,RESaccountsforc.50%ofSpain’sinstalledcapacitySpainpowercapacitysupplycurve,2020(€/MWh)Exhibit59:ThisRESshareinSpain’sinstalledcapacitycouldgrowtoc.80%by2030ESpainpowercapacitysupplycurve,2030E(€/MWh)€0€20€40€60€80€100€120€140€160€180€200InstalledCapacity(GW)11271737525WindHydroGasSolarCoalOt.RESNuclear€0€20€40€60€80€100€120€140€160€180InstalledCapacity(GW)5540326121WindHydroGasSolarNuclearOt.RESSource:GoldmanSachsGlobalInvestmentResearchSource:GoldmanSachsGlobalInvestmentResearch24January202242GoldmanSachsUtilitiesandGreenEnergyDisclosureAppendixRegACWe,AlbertoGandolﬁ,AjayPatel,AmishiGarodia,MafaldaPombeiro,MathieuPidouxandSimonBergmann,herebycertifythatalloftheviewsexpressedinthisreportaccuratelyreﬂectourpersonalviewsaboutthesubjectcompanyorcompaniesanditsortheirsecurities.Wealsocertifythatnopartofourcompensationwas,isorwillbe,directlyorindirectly,relatedtothespeciﬁcrecommendationsorviewsexpressedinthisreport.Unlessotherwisestated,theindividualslistedonthecoverpageofthisreportareanalystsinGoldmanSachs’GlobalInvestmentResearchdivision.GSFactorProﬁleTheGoldmanSachsFactorProﬁleprovidesinvestmentcontextforastockbycomparingkeyattributestothemarket(i.e.ourcoverageuniverse)anditssectorpeers.Thefourkeyattributesdepictedare:Growth,FinancialReturns,Multiple(e.g.valuation)andIntegrated(acompositeofGrowth,FinancialReturnsandMultiple).Growth,FinancialReturnsandMultiplearecalculatedbyusingnormalizedranksforspeciﬁcmetricsforeachstock.Thenormalizedranksforthemetricsarethenaveragedandconvertedintopercentilesfortherelevantattribute.Theprecisecalculationofeachmetricmayvarydependingontheﬁscalyear,industryandregion,butthestandardapproachisasfollows:Growthisbasedonastock’sforward-lookingsalesgrowth,EBITDAgrowthandEPSgrowth(forﬁnancialstocks,onlyEPSandsalesgrowth),withahigherpercentileindicatingahighergrowthcompany.FinancialReturnsisbasedonastock’sforward-lookingROE,ROCEandCROCI(forﬁnancialstocks,onlyROE),withahigherpercentileindicatingacompanywithhigherﬁnancialreturns.Multipleisbasedonastock’sforward-lookingP/E,P/B,price/dividend(P/D),EV/EBITDA,EV/FCFandEV/DebtAdjustedCashFlow(DACF)(forﬁnancialstocks,onlyP/E,P/BandP/D),withahigherpercentileindicatingastocktradingatahighermultiple.TheIntegratedpercentileiscalculatedastheaverageoftheGrowthpercentile,FinancialReturnspercentileand(100%-Multiplepercentile).FinancialReturnsandMultipleusetheGoldmanSachsanalystforecastsattheﬁscalyear-endatleastthreequartersinthefuture.Growthusesinputsfortheﬁscalyearatleastsevenquartersinthefuturecomparedwiththeyearatleastthreequartersinthefuture(onaper-sharebasisforallmetrics).ForamoredetaileddescriptionofhowwecalculatetheGSFactorProﬁle,pleasecontactyourGSrepresentative.M&ARankAcrossourglobalcoverage,weexaminestocksusinganM&Aframework,consideringbothqualitativefactorsandquantitativefactors(whichmayvaryacrosssectorsandregions)toincorporatethepotentialthatcertaincompaniescouldbeacquired.WethenassignaM&Arankasameansofscoringcompaniesunderourratedcoveragefrom1to3,with1representinghigh(30%-50%)probabilityofthecompanybecominganacquisitiontarget,2representingmedium(15%-30%)probabilityand3representinglow(0%-15%)probability.Forcompaniesranked1or2,inlinewithourstandarddepartmentalguidelinesweincorporateanM&Acomponentintoourtargetprice.M&Arankof3isconsideredimmaterialandthereforedoesnotfactorintoourpricetarget,andmayormaynotbediscussedinresearch.QuantumQuantumisGoldmanSachs’proprietarydatabaseprovidingaccesstodetailedﬁnancialstatementhistories,forecastsandratios.Itcanbeusedforin-depthanalysisofasinglecompany,ortomakecomparisonsbetweencompaniesindifferentsectorsandmarkets.DisclosuresTherating(s)forAccionaEnergia,E.ON,EDPRenovaveisSA,EndesaSA,EnelSpA,EnergiasdePortugal,IberdrolaSA,OrstedA/S,RWEandSolariais/arerelativetotheothercompaniesinits/theircoverageuniverse:AccionaEnergia,AccionaSA,Centrica,ContourGlobalPlc,E.ON,EDF,EDPRenovaveisSA,Enagas,EndesaSA,EnelSpA,EnergiasdePortugal,Engie,FortumOYJ,IberdrolaSA,ItalgasSpA,NationalGridPlc,NaturgyEnergyGroup,NordexSE,OrstedA/S,PennonGroup,RWE,RedElectricadeEspana,SSEPlc,SevernTrentPlc,SiemensEnergy,SiemensGamesaRenewableEnergy,SnamSpA,Solaria,Suez,Terna,UniperSE,UnitedUtilitiesGroup,VeoliaEnvironnement,VestasWindSystemsA/SCompany-speciﬁcregulatorydisclosuresCompendiumreport:pleaseseedisclosuresathttps://www.gs.com/research/hedge.html.DisclosuresapplicabletothecompaniesincludedinthiscompendiumcanbefoundinthelatestrelevantpublishedresearchDistributionofratings/investmentbankingrelationshipsGoldmanSachsInvestmentResearchglobalEquitycoverageuniverseAsofJanuary1,2022,GoldmanSachsGlobalInvestmentResearchhadinvestmentratingson3,096equitysecurities.GoldmanSachsassignsstocksasBuysandSellsonvariousregionalInvestmentLists;stocksnotsoassignedaredeemedNeutral.SuchassignmentsequatetoBuy,HoldandSellforthepurposesoftheabovedisclosurerequiredbytheFINRARules.See‘Ratings,Coverageuniverseandrelateddeﬁnitions’below.TheInvestmentBankingRelationshipschartreﬂectsthepercentageofsubjectcompanieswithineachratingcategoryforwhomGoldmanSachshasprovidedinvestmentbankingserviceswithintheprevioustwelvemonths.Pricetargetandratinghistorychart(s)Compendiumreport:pleaseseedisclosuresathttps://www.gs.com/research/hedge.html.DisclosuresapplicabletothecompaniesincludedinthiscompendiumcanbefoundinthelatestrelevantpublishedresearchRegulatorydisclosuresDisclosuresrequiredbyUnitedStateslawsandregulationsSeecompany-speciﬁcregulatorydisclosuresaboveforanyofthefollowingdisclosuresrequiredastocompaniesreferredtointhisreport:managerorco-managerinapendingtransaction;1%orotherownership;compensationforcertainservices;typesofclientrelationships;managed/co-managedpublicofferingsinpriorperiods;directorships;forequitysecurities,marketmakingand/orspecialistrole.GoldmanSachstradesormaytradeasaRatingDistributionInvestmentBankingRelationshipsBuyHoldSellBuyHoldSellGlobal50%35%15%65%57%47%24January202243GoldmanSachsUtilitiesandGreenEnergyprincipalindebtsecurities(orinrelatedderivatives)ofissuersdiscussedinthisreport.Thefollowingareadditionalrequireddisclosures:Ownershipandmaterialconﬂictsofinterest:GoldmanSachspolicyprohibitsitsanalysts,professionalsreportingtoanalystsandmembersoftheirhouseholdsfromowningsecuritiesofanycompanyintheanalyst’sareaofcoverage.Analystcompensation:AnalystsarepaidinpartbasedontheproﬁtabilityofGoldmanSachs,whichincludesinvestmentbankingrevenues.Analystasofﬁcerordirector:GoldmanSachspolicygenerallyprohibitsitsanalysts,personsreportingtoanalystsormembersoftheirhouseholdsfromservingasanofﬁcer,directororadvisorofanycompanyintheanalyst’sareaofcoverage.Non-U.S.Analysts:Non-U.S.analystsmaynotbeassociatedpersonsofGoldmanSachs&Co.LLCandthereforemaynotbesubjecttoFINRARule2241orFINRARule2242restrictionsoncommunicationswithsubjectcompany,publicappearancesandtradingsecuritiesheldbytheanalysts.Distributionofratings:Seethedistributionofratingsdisclosureabove.Pricechart:Seethepricechart,withchangesofratingsandpricetargetsinpriorperiods,above,or,ifelectronicformatorifwithrespecttomultiplecompanieswhicharethesubjectofthisreport,ontheGoldmanSachswebsiteathttps://www.gs.com/research/hedge.html.AdditionaldisclosuresrequiredunderthelawsandregulationsofjurisdictionsotherthantheUnitedStatesThefollowingdisclosuresarethoserequiredbythejurisdictionindicated,excepttotheextentalreadymadeabovepursuanttoUnitedStateslawsandregulations.Australia:GoldmanSachsAustraliaPtyLtdanditsafﬁliatesarenotauthoriseddeposit-takinginstitutions(asthattermisdeﬁnedintheBankingAct1959(Cth))inAustraliaanddonotprovidebankingservices,norcarryonabankingbusiness,inAustralia.Thisresearch,andanyaccesstoit,isintendedonlyfor“wholesaleclients”withinthemeaningoftheAustralianCorporationsAct,unlessotherwiseagreedbyGoldmanSachs.Inproducingresearchreports,membersoftheGlobalInvestmentResearchDivisionofGoldmanSachsAustraliamayattendsitevisitsandothermeetingshostedbythecompaniesandotherentitieswhicharethesubjectofitsresearchreports.InsomeinstancesthecostsofsuchsitevisitsormeetingsmaybemetinpartorinwholebytheissuersconcernedifGoldmanSachsAustraliaconsidersitisappropriateandreasonableinthespeciﬁccircumstancesrelatingtothesitevisitormeeting.Totheextentthatthecontentsofthisdocumentcontainsanyﬁnancialproductadvice,itisgeneraladviceonlyandhasbeenpreparedbyGoldmanSachswithouttakingintoaccountaclient’sobjectives,ﬁnancialsituationorneeds.Aclientshould,beforeactingonanysuchadvice,considertheappropriatenessoftheadvicehavingregardtotheclient’sownobjectives,ﬁnancialsituationandneeds.AcopyofcertainGoldmanSachsAustraliaandNewZealanddisclosureofinterestsandacopyofGoldmanSachs’AustralianSell-SideResearchIndependencePolicyStatementareavailableat:https://www.goldmansachs.com/disclosures/australia-new-zealand/index.html.Brazil:DisclosureinformationinrelationtoCVMResolutionn.20isavailableathttps://www.gs.com/worldwide/brazil/area/gir/index.html.Whereapplicable,theBrazil-registeredanalystprimarilyresponsibleforthecontentofthisresearchreport,asdeﬁnedinArticle20ofCVMResolutionn.20,istheﬁrstauthornamedatthebeginningofthisreport,unlessindicatedotherwiseattheendofthetext.Canada:GoldmanSachsCanadaInc.isanafﬁliateofTheGoldmanSachsGroupInc.andthereforeisincludedinthecompanyspeciﬁcdisclosuresrelatingtoGoldmanSachs(asdeﬁnedabove).GoldmanSachsCanadaInc.hasapprovedof,andagreedtotakeresponsibilityfor,thisresearchreportinCanadaifandtotheextentthatGoldmanSachsCanadaInc.disseminatesthisresearchreporttoitsclients.HongKong:FurtherinformationonthesecuritiesofcoveredcompaniesreferredtointhisresearchmaybeobtainedonrequestfromGoldmanSachs(Asia)L.L.C.India:FurtherinformationonthesubjectcompanyorcompaniesreferredtointhisresearchmaybeobtainedfromGoldmanSachs(India)SecuritiesPrivateLimited,ResearchAnalyst-SEBIRegistrationNumberINH000001493,951-A,RationalHouse,AppasahebMaratheMarg,Prabhadevi,Mumbai400025,India,CorporateIdentityNumberU74140MH2006FTC160634,Phone+912266169000,Fax+912266169001.GoldmanSachsmaybeneﬁciallyown1%ormoreofthesecurities(assuchtermisdeﬁnedinclause2(h)theIndianSecuritiesContracts(Regulation)Act,1956)ofthesubjectcompanyorcompaniesreferredtointhisresearchreport.Japan:Seebelow.Korea:Thisresearch,andanyaccesstoit,isintendedonlyfor“professionalinvestors”withinthemeaningoftheFinancialServicesandCapitalMarketsAct,unlessotherwiseagreedbyGoldmanSachs.FurtherinformationonthesubjectcompanyorcompaniesreferredtointhisresearchmaybeobtainedfromGoldmanSachs(Asia)L.L.C.,SeoulBranch.NewZealand:GoldmanSachsNewZealandLimitedanditsafﬁliatesareneither“registeredbanks”nor“deposittakers”(asdeﬁnedintheReserveBankofNewZealandAct1989)inNewZealand.Thisresearch,andanyaccesstoit,isintendedfor“wholesaleclients”(asdeﬁnedintheFinancialAdvisersAct2008)unlessotherwiseagreedbyGoldmanSachs.AcopyofcertainGoldmanSachsAustraliaandNewZealanddisclosureofinterestsisavailableat:https://www.goldmansachs.com/disclosures/australia-new-zealand/index.html.Russia:ResearchreportsdistributedintheRussianFederationarenotadvertisingasdeﬁnedintheRussianlegislation,butareinformationandanalysisnothavingproductpromotionastheirmainpurposeanddonotprovideappraisalwithinthemeaningoftheRussianlegislationonappraisalactivity.ResearchreportsdonotconstituteapersonalizedinvestmentrecommendationasdeﬁnedinRussianlawsandregulations,arenotaddressedtoaspeciﬁcclient,andarepreparedwithoutanalyzingtheﬁnancialcircumstances,investmentproﬁlesorriskproﬁlesofclients.GoldmanSachsassumesnoresponsibilityforanyinvestmentdecisionsthatmaybetakenbyaclientoranyotherpersonbasedonthisresearchreport.Singapore:GoldmanSachs(Singapore)Pte.(CompanyNumber:198602165W),whichisregulatedbytheMonetaryAuthorityofSingapore,acceptslegalresponsibilityforthisresearch,andshouldbecontactedwithrespecttoanymattersarisingfrom,orinconnectionwith,thisresearch.Taiwan:Thismaterialisforreferenceonlyandmustnotbereprintedwithoutpermission.Investorsshouldcarefullyconsidertheirowninvestmentrisk.Investmentresultsaretheresponsibilityoftheindividualinvestor.UnitedKingdom:PersonswhowouldbecategorizedasretailclientsintheUnitedKingdom,assuchtermisdeﬁnedintherulesoftheFinancialConductAuthority,shouldreadthisresearchinconjunctionwithpriorGoldmanSachsresearchonthecoveredcompaniesreferredtohereinandshouldrefertotheriskwarningsthathavebeensenttothembyGoldmanSachsInternational.Acopyoftheseriskswarnings,andaglossaryofcertainﬁnancialtermsusedinthisreport,areavailablefromGoldmanSachsInternationalonrequest.EuropeanUnionandUnitedKingdom:DisclosureinformationinrelationtoArticle6(2)oftheEuropeanCommissionDelegatedRegulation(EU)(2016/958)supplementingRegulation(EU)No596/2014oftheEuropeanParliamentandoftheCouncil(includingasthatDelegatedRegulationisimplementedintoUnitedKingdomdomesticlawandregulationfollowingtheUnitedKingdom’sdeparturefromtheEuropeanUnionandtheEuropeanEconomicArea)withregardtoregulatorytechnicalstandardsforthetechnicalarrangementsforobjectivepresentationofinvestmentrecommendationsorotherinformationrecommendingorsuggestinganinvestmentstrategyandfordisclosureofparticularinterestsorindicationsofconﬂictsofinterestisavailableathttps://www.gs.com/disclosures/europeanpolicy.htmlwhichstatestheEuropeanPolicyforManagingConﬂictsofInterestinConnectionwithInvestmentResearch.Japan:GoldmanSachsJapanCo.,Ltd.isaFinancialInstrumentDealerregisteredwiththeKantoFinancialBureauunderregistrationnumberKinsho69,andamemberofJapanSecuritiesDealersAssociation,FinancialFuturesAssociationofJapanandTypeIIFinancialInstrumentsFirmsAssociation.Salesandpurchaseofequitiesaresubjecttocommissionpre-determinedwithclientsplusconsumptiontax.Seecompany-speciﬁcdisclosuresastoanyapplicabledisclosuresrequiredbyJapanesestockexchanges,theJapaneseSecuritiesDealersAssociationortheJapaneseSecuritiesFinanceCompany.Ratings,coverageuniverseandrelateddeﬁnitionsBuy(B),Neutral(N),Sell(S)AnalystsrecommendstocksasBuysorSellsforinclusiononvariousregionalInvestmentLists.BeingassignedaBuyorSellonanInvestmentListisdeterminedbyastock’stotalreturnpotentialrelativetoitscoverageuniverse.AnystocknotassignedasaBuyoraSellonanInvestmentListwithanactiverating(i.e.,astockthatisnotRatingSuspended,NotRated,CoverageSuspendedorNotCovered),isdeemedNeutral.Eachregion’sInvestmentReviewCommitteemanagesRegionalConvictionlists,whichrepresentinvestmentrecommendationsfocusedonthesizeofthetotalreturnpotentialand/orthelikelihoodoftherealizationofthereturnacrosstheirrespectiveareasofcoverage.TheadditionorremovalofstocksfromsuchConvictionlistsdonotrepresentachangeintheanalysts’investmentratingforsuchstocks.Totalreturnpotentialrepresentstheupsideordownsidedifferentialbetweenthecurrentsharepriceandthepricetarget,includingallpaidoranticipateddividends,expectedduringthetimehorizonassociatedwiththepricetarget.Pricetargetsarerequiredforallcoveredstocks.Thetotal24January202244GoldmanSachsUtilitiesandGreenEnergyreturnpotential,pricetargetandassociatedtimehorizonarestatedineachreportaddingorreiteratinganInvestmentListmembership.CoverageUniverse:Alistofallstocksineachcoverageuniverseisavailablebyprimaryanalyst,stockandcoverageuniverseathttps://www.gs.com/research/hedge.html.NotRated(NR).Theinvestmentrating,targetpriceandearningsestimates(whererelevant)havebeensuspendedpursuanttoGoldmanSachspolicywhenGoldmanSachsisactinginanadvisorycapacityinamergerorinastrategictransactioninvolvingthiscompany,whentherearelegal,regulatoryorpolicyconstraintsduetoGoldmanSachs’involvementinatransaction,andincertainothercircumstances.RatingSuspended(RS).GoldmanSachsResearchhassuspendedtheinvestmentratingandpricetargetforthisstock,becausethereisnotasufﬁcientfundamentalbasisfordetermininganinvestmentratingortargetprice.Thepreviousinvestmentratingandtargetprice,ifany,arenolongerineffectforthisstockandshouldnotbereliedupon.CoverageSuspended(CS).GoldmanSachshassuspendedcoverageofthiscompany.NotCovered(NC).GoldmanSachsdoesnotcoverthiscompany.NotAvailableorNotApplicable(NA).Theinformationisnotavailablefordisplayorisnotapplicable.NotMeaningful(NM).Theinformationisnotmeaningfulandisthereforeexcluded.Globalproduct;distributingentitiesTheGlobalInvestmentResearchDivisionofGoldmanSachsproducesanddistributesresearchproductsforclientsofGoldmanSachsonaglobalbasis.AnalystsbasedinGoldmanSachsofﬁcesaroundtheworldproduceresearchonindustriesandcompanies,andresearchonmacroeconomics,currencies,commoditiesandportfoliostrategy.ThisresearchisdisseminatedinAustraliabyGoldmanSachsAustraliaPtyLtd(ABN21006797897);inBrazilbyGoldmanSachsdoBrasilCorretoradeTítuloseValoresMobiliáriosS.A.;PublicCommunicationChannelGoldmanSachsBrazil:08007275764and/orcontatogoldmanbrasil@gs.com.AvailableWeekdays(exceptholidays),from9amto6pm.CanaldeComunicaçãocomoPúblicoGoldmanSachsBrasil:08007275764e/oucontatogoldmanbrasil@gs.com.Horáriodefuncionamento:segunda-feiraàsexta-feira(excetoferiados),das9hàs18h;inCanadabyeitherGoldmanSachsCanadaInc.orGoldmanSachs&Co.LLC;inHongKongbyGoldmanSachs(Asia)L.L.C.;inIndiabyGoldmanSachs(India)SecuritiesPrivateLtd.;inJapanbyGoldmanSachsJapanCo.,Ltd.;intheRepublicofKoreabyGoldmanSachs(Asia)L.L.C.,SeoulBranch;inNewZealandbyGoldmanSachsNewZealandLimited;inRussiabyOOOGoldmanSachs;inSingaporebyGoldmanSachs(Singapore)Pte.(CompanyNumber:198602165W);andintheUnitedStatesofAmericabyGoldmanSachs&Co.LLC.GoldmanSachsInternationalhasapprovedthisresearchinconnectionwithitsdistributionintheUnitedKingdom.EffectivefromthedateoftheUnitedKingdom’sdeparturefromtheEuropeanUnionandtheEuropeanEconomicArea(“BrexitDay”)thefollowinginformationwithrespecttodistributingentitieswillapply:GoldmanSachsInternational(“GSI”),authorisedbythePrudentialRegulationAuthority(“PRA”)andregulatedbytheFinancialConductAuthority(“FCA”)andthePRA,hasapprovedthisresearchinconnectionwithitsdistributionintheUnitedKingdom.EuropeanEconomicArea:GSI,authorisedbythePRAandregulatedbytheFCAandthePRA,disseminatesresearchinthefollowingjurisdictionswithintheEuropeanEconomicArea:theGrandDuchyofLuxembourg,Italy,theKingdomofBelgium,theKingdomofDenmark,theKingdomofNorway,theRepublicofFinland,Portugal,theRepublicofCyprusandtheRepublicofIreland;GS-SuccursaledeParis(Parisbranch)which,fromBrexitDay,willbeauthorisedbytheFrenchAutoritédecontrôleprudentieletderesolution(“ACPR”)andregulatedbytheAutoritédecontrôleprudentieletderesolutionandtheAutoritédesmarchesﬁnanciers(“AMF”)disseminatesresearchinFrance;GSI-SucursalenEspaña(Madridbranch)authorizedinSpainbytheComisiónNacionaldelMercadodeValoresdisseminatesresearchintheKingdomofSpain;GSI-SwedenBankﬁlial(Stockholmbranch)isauthorizedbytheSFSAasa“thirdcountrybranch”inaccordancewithChapter4,Section4oftheSwedishSecuritiesandMarketAct(Sw.lag(2007:528)omvärdepappersmarknaden)disseminatesresearchintheKingdomofSweden;GoldmanSachsBankEuropeSE(“GSBE”)isacreditinstitutionincorporatedinGermanyand,withintheSingleSupervisoryMechanism,subjecttodirectprudentialsupervisionbytheEuropeanCentralBankandinotherrespectssupervisedbyGermanFederalFinancialSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht,BaFin)andDeutscheBundesbankanddisseminatesresearchintheFederalRepublicofGermanyandthosejurisdictionswithintheEuropeanEconomicAreawhereGSIisnotauthorisedtodisseminateresearchandadditionally,GSBE,CopenhagenBranchﬁlialafGSBE,Tyskland,supervisedbytheDanishFinancialAuthoritydisseminatesresearchintheKingdomofDenmark;GSBE-SucursalenEspaña(Madridbranch)subject(toalimitedextent)tolocalsupervisionbytheBankofSpaindisseminatesresearchintheKingdomofSpain;GSBE-SuccursaleItalia(Milanbranch)totherelevantapplicableextent,subjecttolocalsupervisionbytheBankofItaly(Bancad’Italia)andtheItalianCompaniesandExchangeCommission(CommissioneNazionaleperleSocietàelaBorsa“Consob”)disseminatesresearchinItaly;GSBE-SuccursaledeParis(Parisbranch),supervisedbytheAMFandbytheACPRdisseminatesresearchinFrance;andGSBE-SwedenBankﬁlial(Stockholmbranch),toalimitedextent,subjecttolocalsupervisionbytheSwedishFinancialSupervisoryAuthority(Finansinpektionen)disseminatesresearchintheKingdomofSweden.GeneraldisclosuresThisresearchisforourclientsonly.OtherthandisclosuresrelatingtoGoldmanSachs,thisresearchisbasedoncurrentpublicinformationthatweconsiderreliable,butwedonotrepresentitisaccurateorcomplete,anditshouldnotbereliedonassuch.Theinformation,opinions,estimatesandforecastscontainedhereinareasofthedatehereofandaresubjecttochangewithoutpriornotiﬁcation.Weseektoupdateourresearchasappropriate,butvariousregulationsmaypreventusfromdoingso.Otherthancertainindustryreportspublishedonaperiodicbasis,thelargemajorityofreportsarepublishedatirregularintervalsasappropriateintheanalyst’sjudgment.GoldmanSachsconductsaglobalfull-service,integratedinvestmentbanking,investmentmanagement,andbrokeragebusiness.WehaveinvestmentbankingandotherbusinessrelationshipswithasubstantialpercentageofthecompaniescoveredbyourGlobalInvestmentResearchDivision.GoldmanSachs&Co.LLC,theUnitedStatesbrokerdealer,isamemberofSIPC(https://www.sipc.org).Oursalespeople,traders,andotherprofessionalsmayprovideoralorwrittenmarketcommentaryortradingstrategiestoourclientsandprincipaltradingdesksthatreﬂectopinionsthatarecontrarytotheopinionsexpressedinthisresearch.Ourassetmanagementarea,principaltradingdesksandinvestingbusinessesmaymakeinvestmentdecisionsthatareinconsistentwiththerecommendationsorviewsexpressedinthisresearch.Theanalystsnamedinthisreportmayhavefromtimetotimediscussedwithourclients,includingGoldmanSachssalespersonsandtraders,ormaydiscussinthisreport,tradingstrategiesthatreferencecatalystsoreventsthatmayhaveanear-termimpactonthemarketpriceoftheequitysecuritiesdiscussedinthisreport,whichimpactmaybedirectionallycountertotheanalyst’spublishedpricetargetexpectationsforsuchstocks.Anysuchtradingstrategiesaredistinctfromanddonotaffecttheanalyst’sfundamentalequityratingforsuchstocks,whichratingreﬂectsastock’sreturnpotentialrelativetoitscoverageuniverseasdescribedherein.Weandourafﬁliates,ofﬁcers,directors,andemployees,excludingequityandcreditanalysts,willfromtimetotimehavelongorshortpositionsin,actasprincipalin,andbuyorsell,thesecuritiesorderivatives,ifany,referredtointhisresearch.TheviewsattributedtothirdpartypresentersatGoldmanSachsarrangedconferences,includingindividualsfromotherpartsofGoldmanSachs,donotnecessarilyreﬂectthoseofGlobalInvestmentResearchandarenotanofﬁcialviewofGoldmanSachs.Anythirdpartyreferencedherein,includinganysalespeople,tradersandotherprofessionalsormembersoftheirhousehold,mayhavepositionsintheproductsmentionedthatareinconsistentwiththeviewsexpressedbyanalystsnamedinthisreport.Thisresearchisnotanoffertosellorthesolicitationofanoffertobuyanysecurityinanyjurisdictionwheresuchanofferorsolicitationwouldbe24January202245GoldmanSachsUtilitiesandGreenEnergyillegal.Itdoesnotconstituteapersonalrecommendationortakeintoaccounttheparticularinvestmentobjectives,ﬁnancialsituations,orneedsofindividualclients.Clientsshouldconsiderwhetheranyadviceorrecommendationinthisresearchissuitablefortheirparticularcircumstancesand,ifappropriate,seekprofessionaladvice,includingtaxadvice.Thepriceandvalueofinvestmentsreferredtointhisresearchandtheincomefromthemmayﬂuctuate.Pastperformanceisnotaguidetofutureperformance,futurereturnsarenotguaranteed,andalossoforiginalcapitalmayoccur.Fluctuationsinexchangeratescouldhaveadverseeffectsonthevalueorpriceof,orincomederivedfrom,certaininvestments.Certaintransactions,includingthoseinvolvingfutures,options,andotherderivatives,giverisetosubstantialriskandarenotsuitableforallinvestors.InvestorsshouldreviewcurrentoptionsandfuturesdisclosuredocumentswhichareavailablefromGoldmanSachssalesrepresentativesorathttps://www.theocc.com/about/publications/character-risks.jspandhttps://www.ﬁadocumentation.org/ﬁa/regulatory-disclosures_1/ﬁa-uniform-futures-and-options-on-futures-risk-disclosures-booklet-pdf-version-2018.Transactioncostsmaybesigniﬁcantinoptionstrategiescallingformultiplepurchaseandsalesofoptionssuchasspreads.Supportingdocumentationwillbesupplieduponrequest.DifferingLevelsofServiceprovidedbyGlobalInvestmentResearch:ThelevelandtypesofservicesprovidedtoyoubytheGlobalInvestmentResearchdivisionofGSmayvaryascomparedtothatprovidedtointernalandotherexternalclientsofGS,dependingonvariousfactorsincludingyourindividualpreferencesastothefrequencyandmannerofreceivingcommunication,yourriskproﬁleandinvestmentfocusandperspective(e.g.,marketwide,sectorspeciﬁc,longterm,shortterm),thesizeandscopeofyouroverallclientrelationshipwithGS,andlegalandregulatoryconstraints.Asanexample,certainclientsmayrequesttoreceivenotiﬁcationswhenresearchonspeciﬁcsecuritiesispublished,andcertainclientsmayrequestthatspeciﬁcdataunderlyinganalysts’fundamentalanalysisavailableonourinternalclientwebsitesbedeliveredtothemelectronicallythroughdatafeedsorotherwise.Nochangetoananalyst’sfundamentalresearchviews(e.g.,ratings,pricetargets,ormaterialchangestoearningsestimatesforequitysecurities),willbecommunicatedtoanyclientpriortoinclusionofsuchinformationinaresearchreportbroadlydisseminatedthroughelectronicpublicationtoourinternalclientwebsitesorthroughothermeans,asnecessary,toallclientswhoareentitledtoreceivesuchreports.Allresearchreportsaredisseminatedandavailabletoallclientssimultaneouslythroughelectronicpublicationtoourinternalclientwebsites.Notallresearchcontentisredistributedtoourclientsoravailabletothird-partyaggregators,norisGoldmanSachsresponsiblefortheredistributionofourresearchbythirdpartyaggregators.Forresearch,modelsorotherdatarelatedtooneormoresecurities,marketsorassetclasses(includingrelatedservices)thatmaybeavailabletoyou,pleasecontactyourGSrepresentativeorgotohttps://research.gs.com.Disclosureinformationisalsoavailableathttps://www.gs.com/research/hedge.htmlorfromResearchCompliance,200WestStreet,NewYork,NY10282.©2022GoldmanSachs.Nopartofthismaterialmaybe(i)copied,photocopiedorduplicatedinanyformbyanymeansor(ii)redistributedwithoutthepriorwrittenconsentofTheGoldmanSachsGroup,Inc.24January202246GoldmanSachsUtilitiesandGreenEnergy

1、当您付费下载文档后，您只拥有了使用权限，并不意味着购买了版权，文档只能用于自身使用，不得用于其他商业用途（如 [转卖]进行直接盈利或[编辑后售卖]进行间接盈利）。
2、本站所有内容均由合作方或网友上传，本站不对文档的完整性、权威性及其观点立场正确性做任何保证或承诺！文档内容仅供研究参考，付费前请自行鉴别。
3、如文档内容存在违规，或者侵犯商业秘密、侵犯著作权等，请点击“违规举报”。

碎片内容

碳中和的最新文档