Infrastructure at the Heart: Why the Energy Transition Is a Delivery and Business Model Challenge. Not Tech.
By Serhat Aydogdu | The Curious Learners
We often celebrate the technological wonders of the energy transition. Solar panels on rooftops, wind turbines stretching across coastlines, smart meters, batteries, advanced cooling systems. These tools are essential, and for the most part, they’re in deployment. But the truth is, most of the heavy lifting in the energy transition isn’t about breakthrough technologies. It’s about getting existing solutions deployed, at scale, with speed, and in the right places. It’s about fixing the pipes, upgrading the wires, adapting business models, and coordinating thousands of actors across highly fragmented markets.
What’s slowing us down are the questions around who builds the infrastructure, how it gets paid for, whether it can scale with attractive unit economics and cost-effective solutions for customers, and if the system can even absorb it.
The real barriers today are structural, institutional, and commercial, not technological. This is a systems challenge, not just an innovation challenge.
Infrastructure: Check. Though It Needs an Upgrade
Much of the world’s energy infrastructure like grids, substations, and permitting processes was built for a different era. It wasn’t designed for a system where electricity flows in multiple directions, where demand responds in real time, and where energy is increasingly local and variable.
Even when financing is available and climate ambition is high, projects get stuck. Renewable energy developers are facing long delays just to connect to the grid. Transmission lines take years to permit. Distribution networks often lack the digital backbone to handle the complexity of modern energy flows.
The International Renewable Energy Agency estimates that we need around $150 trillion of investment in transition technologies and infrastructure by 2050 to stay on track for 1.5 degrees - which we almost certainly know that is not achievable. But, that’s more than $5 trillion per year. The problem isn’t just raising the money. It’s getting projects approved, built, and integrated into systems that weren’t designed for this kind of transformation.
Momentum Is Building, but the System Is Under Strain
While the clean energy transition has gained momentum, global systems are still under pressure from geopolitical volatility, supply chain vulnerabilities, and record energy demand. In 2024, energy use surged by 2.2%, driven in part by electrification and AI-powered data centers, even as clean energy investment topped $2 trillion. Yet, this investment remains far below the $5.6 trillion needed annually to meet climate goals.
Notably, growth in investment has begun to slow, and energy-related CO₂ emissions reached an all-time high. As the World Economic Forum’s latest Energy Transition Index shows, only 28% of countries made progress across energy security, sustainability, and equity at the same time1.
What this reinforces is simple: even as technology scales, the systems around it such as policy, skills, infrastructure, and investment alignment must catch up for the transition to stay on track.
The Real Innovation? Business Models, Not Tech
Most of the core technologies in the transition, solar, wind, batteries and heat pumps, are no longer bleeding edge. They work. They’re affordable as they went through a steep cost-down curve. What’s missing are the business models that turn technical feasibility into scalable, investable systems.
Utilities in many cases are still rewarded for building big, centralised infrastructure, rather than enabling distributed, flexible, responsive systems. Tools like virtual power plants and demand-side flexibility are technically viable, but commercially fragile. Market structures haven’t caught up.
The World Economic Forum’s 2025 Energy Transition Index makes this clear. While most countries improved in at least one area, only a minority made progress across the board: sustainability, equity, and security. The real issue isn’t lack of technology or capital. It’s that policy, regulation, and market signals aren’t always aligned.
The Real Risk is Delivery
From an investor’s perspective, this is the new reality. The key uncertainty is no longer whether a technology works, but whether it can be delivered. Permitting timelines, regulatory complexity, and grid access are often the make-or-break factors.
McKinsey sums this up well2: the energy transition is being held back not by what we don’t know how to do, but by the friction in how we do it. Fragmented rules, slow permitting, and legacy systems slow things down far more than physics ever will.
Look at the NeuConnect interconnector, which is an investment of Allianz Capital Partners. It’s a new electricity link between the UK and Germany, which is planned for full operations in 20283. The technology isn’t revolutionary. What made it possible was the coordination between regulators, government support, and long-term institutional capital willing to stay the course.
There’s Also a Missing Link in Skills
From my own research on growth-stage climate-tech investing, it’s clear there’s a blind spot in how investors evaluate execution risk, especially for hardware-based companies.
Most investors are used to assessing software. But hardware companies operate under entirely different conditions. They face risks in supply chain continuity, construction delays, the Total Cost of Ownership (TCO) assessment and market adoption cycles that don’t resemble SaaS growth curves.
This means the skills needed to assess and support these companies are different. Investors need to understand things like:
How pilot plants scale into commercial facilities
How to price in qualification timelines and offtake uncertainty
What construction and procurement risks look like
How to model learning curves for physical production
But these areas are rarely built into traditional due diligence frameworks. It’s not just a capital gap, it’s also a capability gap.
Resilience is Built, not Bought
The next wave of progress in the energy transition won’t come from some surprise breakthrough in solar panels or battery chemistry. It will come from our ability to get projects built, on time, within budget, and in systems that are ready to absorb them.
That means developers who know how to work across jurisdictions and navigate rules. It means investors who understand how revenue streams stack up, how market access works, and how regulation affects risk. And it means policymakers who can streamline approvals, offer fair cost recovery, and give projects a predictable runway.
La Caisse’s (fka CDPQ) 2025–2030 climate strategy reflects this shift4. They’re not just looking for low-carbon assets. They’re actively backing companies that have a plan to transition. Not just a target, but a business model that makes climate part of how they operate and grow.
From Megawatts to Mechanisms
We need to shift the conversation. It’s not just about how many megawatts of clean energy we can install. It’s about whether the systems, structures, and incentives are in place to make them work.
Before we ask if a technology is ready, we should ask if the project is ready to be permitted. Is the market ready to value what it provides? Can the business model scale? Can the grid handle it?
This is where the transition will succeed or stall. It won’t be decided in the lab. It will be decided in the field, in the quality of delivery, in the creativity of business models, and in the resilience of execution.