
Experts estimate that investments totalling €13.2 trillion will be required by 2050 to ensure a carbon-neutral energy supply in Germany (Source: PwC Study “Investment and Energy Costs of the Energy Transition”, 2024).
The financial strength of German energy companies alone will not be sufficient to meet this capital demand. Private capital will therefore play a crucial role in financing the energy transition in Germany.
Private equity investors traditionally focus on acquiring companies that generate solid returns within a short investment horizon of five to seven years. The availability of dry powder and intense competition for high-quality companies have led private capital investors to enter new and diversified investment fields. In recent years, they have increasingly invested in infrastructure projects, despite typically lower return expectations and longer holding periods in this sector.
There are now numerous examples of private equity investments in Germany’s wind and solar energy infrastructure, as well as in storage technologies. Notable cases include the acquisition of VSB Group by Partners Group (2020) and the purchase of BayWa r.e. by Energy Infrastructure Partners (2021).
Significant private equity transactions have also taken place in the energy supply sector, for instance the acquisition of gas network operator Open Grid Europe (formerly E.ON) by Macquarie (2012) and the purchase of Steag AG by Spanish PE investor Asterion (2023). Additionally, private equity (PE) firms hold stakes in several municipal utilities. For example, KKR acquired a 49% stake in Leipzig’s municipal utilities for €300 million in 2014, Allianz Capital Partners took a 30% stake in Munich’s municipal utilities for €500 million in 2016, and Ardian invested a three-digit million sum for a 25% share in Düsseldorf’s municipal utilities in 2018.
Further investments are needed to finance the green energy transition, particularly for the purpose of modernising electricity and infrastructure networks to ensure the energy supply of major industrial regions. PE investors could help cover the necessary equity capital for new technologies and infrastructure, thereby advancing the energy transition. But how willing are they to invest?
A PwC survey conducted in December 2024 among more than 100 investment experts from energy companies, private equity, private debt, and infrastructure funds across Europe presents a cautiously optimistic outlook:
Compared to 2024, do you expect to do more or fewer energy transition deals in 2025?
Source: PwC “Private capital for financing the energy transition in Germany”
In which sectors do you expect to do deals over the next 12 months? Pick all that apply.
Source: PwC “Private capital for financing the energy transition in Germany”
Note that the dynamics of each sector vary significantly by country. Some sectors also contain multiple different business models with different characteristics (e.g. fleet charging vs. public charging, long-term vs. short-term energy storage). Please contact your local PwC Deals team for a more detailed interpretation of these results.
Additionally, 53% of respondents anticipate new transactions in Germany and the DACH region over the next 12 months. This places the region second after the United Kingdom and Ireland (71%) and ahead of the Nordic countries (44%).
In which geographies do you expect to do deals over the next 12 months? Pick all that apply.
Source: PwC “Private capital for financing the energy transition in Germany”
These results will to some extent reflect the locations of the respondents, but it should also be noted that many investors have pan-European portfolios.
However, such optimistic expectations are tempered by macroeconomic uncertainties, political risks and high price expectations from sellers.
What is the biggest obstacle to achieving your desired level of deal activity in 2025?
Private capital providers cite the high price expectations of sellers as the biggest challenge, as many assets were acquired at inflated prices in the past. The second major concern is political uncertainty due to geopolitical conflicts, US protectionism (tariffs), and shifting political stances on renewable energy support.
Other challenges include:
For private investors, stable revenue streams, profitability, and planning security over the entire investment period are essential. Companies seeking PE investment should meet the following criteria:
Private capital will play a key role in advancing the energy transition. Energy supply companies should actively prepare to attract investors by implementing transparent, sustainable, and innovative strategies.