Our client has been investing heavily in the green sector and had decided that heat was a strategic area of importance to move into. After an initial scan of the sector, the client became aware that a range of technologies, business models and propositions would collectively deliver a decarbonised heat future – but it was far from clear which of these would succeed or grow the most. The client was looking to invest up to €150M in a target with a goal of existing in 5 – 10 years with the target being valued at over €1 billion. Therefore, they sought expert support to inform where best for it focus their efforts when looking for markets.
The key question
Which parts of the low-carbon heating landscape in the UK and EU offer the best growth potential out to 2030 and highest margins? Within these areas, which companies are active and of the right size & risk profile for investing in?
What was needed
- Insights and analysis on future growth potential of different aspects of the heat landscape, such as heat pumps, district heating, heat as a service, installer platforms, etc.
- A clear view and supporting rationale on the outlook for growth of different technologies and business models.
- Identification of key players in high growth areas and insight on margin and potential growth rate.
Based on our deep knowledge and existing research analysis current and future deployment of decarbonised heat across Europe, we identified 10 key areas across the heating landscape with significant potential for growth to 2030.
Working closely with the client, we defined criteria for assessing these areas and held workshops with the client to prioritise 4 areas for further exploration that aligned closely with the risk profile and investment strategy of the client.
In each of these prioritised areas, we identified and profiled many players active in each space (looking at annual sales, growth plans, margins, business models) to support the client in deciding which ones to target for next steps.
Our expert knowledge allowed us to quickly add value to and to challenge the client’s thinking. By providing a comprehensive overview the client gained confidence to decide where to focus their investment activity. Our impartiality added weight to our recommendations