Why New Energy Is a Sector with Both Winning Probability and Favorable Odds

Why do geopolitical conflicts unexpectedly accelerate the development of new energy?

As geopolitical conflicts escalate and the outlook becomes highly uncertain, single-sided bets are risky. After the U.S. issued a 48-hour final warning and Iran responded with a tough stance, the prospects of U.S.-Iran conflict have become even more unpredictable. Capital markets are increasingly trading on the possibility of economic stagnation and liquidity tightening caused by rate hikes.

New energy is less affected by war: The rise in oil and gas prices driven by conflict will lead to higher electricity prices, replicating the energy crisis trading seen in 2022 during geopolitical tensions. As a distributed resource not limited by resource endowment, new energy will receive further policy support and demand growth. Meanwhile, the war itself will also create significant reconstruction needs for energy infrastructure.

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