Balfour Beatty plc * (Q+A) | Buy | Is it too late to join the party?

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Balfour Beatty plc * (Q+A) | Buy | Is it too late to join the party?

Balfour Beatty plc Buy | 1040p

Space-cooling demand has tripled since 1990 and could triple again by 2060, driven by

climate change and rising incomes. This will add pressure to power grids, emissions, and

heat-stress risks, particularly in Asia, India, and the Middle East and North Africa.

Chart 14:Final energy end markets (PWh/year)

Source: DNV, Kepler Cheuvreux Abbreviations: B: Buildings, M: Manufacturing, O: Other

Similar to a global energy system that is steadily moving away from fossil fuels, the UK’s

electricity mix is undergoing a structural reset. According to DESNZ 2025 data, renewables

reached 50.4% of UK electricity generation in 2024, while wind and solar reached 34.3% and

gas fell to 30.4%. Coal, once the backbone of UK power generation, has effectively exited

the system, with the last coal-fired power station closing in September 2024. Gas remains

an important source of dispatchable generation, but its role is shrinking as renewables

scale. In 2024, renewables accounted for just over half of UK electricity generation for the

first time, while a combination of wind and solar output exceeded gas-fired generation. This

marks a clear inflection point: the UK power system is no longer transitioning at the margin

level, but is being rebuilt around low-carbon capacity.

We expect this direction of travel to continue over the coming decades. Offshore wind,

onshore wind, solar, nuclear and selected carbon capture-enabled generation are set to

take a larger share of electricity supply, supported by contracts-for-difference, new nuclear

projects, and continued deployment of distributed solar. However, we do not expect this

transition to be linear.