In a word, 2026 will witness “shakeout”. Inputs have stabilised, but outcomes will diverge. In countless verticals – VPPs, IPPs, CPOs, AMPs, optimisers, developers – the dust is settling and victors are emerging. The excess capacity littering energy transition verticals should fall away as customers, capital and opportunity coalesce around the strong. This is good: pricing will stabilise, costs will fall, talent will congregate, execution will improve, and capital will secure better returns. In this article, we note six quiet but consequential tides shaping these emerging winners in 2026. None is AI (yet).
1. Channel beats innovation
2. Continuing consolidation
3. Neutral data layers
4. Transition fuel revival
5. Silent exits crisis
6. IPP 2.0 action
1. Channel beats innovation
The second climate tech boom repeated the cleantech 1.0’s error of idolising technology. Radical innovation has been all but irrelevant to Europe’s energy transition – it is almost entirely about optimising older technologies (photovoltaics, lithium-ion cells, wind turbines, electric motors). With slowing demand growth forecasts, the maximisation of channel or customers becomes key to revenue growth, forcing silo structures to break down: C&I (commercial & industrial) suppliers expanded from solar to batteries, to charging, to flexibility, to orchestration, boosted by the rollout of dynamic tariffs. Energy suppliers expanded to installations, services, software and financing. These channel owners may ultimately break down the barriers between electrons and joules too. The most admired companies – Octopus, Hometree, Zenobe – command channels, not patents.
2. Continuing consolidation
The conventional response to slowing demand is consolidation: trimming overhead against a larger revenue base to accelerate breakeven. Verticals with disappointing growth and weak unit economics – EV charging, BTM solar, resi installation, energy supply – will consolidate, spurred by sponsors building exit-ready platforms on their winners.
3. Neutral data layers
European hardware companies had embraced digitisation and software development, to ‘own’ their customers. Many succeeded, locking customers in to outdated proprietary software. Now customers are responding. We note a growing preference for data-neutral layers and vendor-independent platforms: portability and interoperability are now valued. This commoditisation of software again reinforces Point 1: channel and customer relationships drive more competitive advantage than most IP.
4. Transition fuel revival
Intermittency creates a premium for reliability. Not long ago, the only transition fuel was gas, but now geothermal, marine and other sources of predictable – but less economic – supply, may see enhanced investment interest to capture this ‘baseload premium’. Increased investment flows may signal this revived interest. But interest is distinct from viability, and we repeat Point 1 [channel beats innovation]: geothermal’s LCOE remains 2–3× higher than solar/wind ($40–140/MWh vs. $27–70/MWh), and marine is 3–10× more expensive. Deployment of both is glacial.
5. Silent exits crisis
Private capital has a silent exits crisis[1] and our industries are not immune. Infrastructure funds have run cashflow-negative to LPs since 2022. Renewable energy M&A deal value collapsed 41% in the first nine months of 2025. Countless headline IPP exits never materialised. The ‘cyclical slow down’ is looking increasingly structural. Without sharply lower interest rates, accessing liquidity for reinvestment will become increasingly urgent as funds mature in the face of weak public market appetite and finite continuation options.
6. IPP 2.0 action
Our hypothesis on IPP evolution is ever more mainstream (aka NextGen IPP). Fundamentally this IPP 2.0 concept continues the same argument as that regarding channel ownership: the next generation of IPPs must own customers, break down technology silos, etc. However theories and action are distinct. In 2026, the inflection from discussion to deployment finally arrives: with mounting trinity technology portfolios, country exits, and mergers marrying IPPs with different generation technologies to synthesize green baseload power.
Conclusions
Away from breathless AI boosterism, these diverse tides may have more immediate impact. They will gently float winners to the surface. We will re-examine some in future articles, and address the remaining growth hotspots like heat networks, European BESS, interim power and grid expansions. Along the way, we will all be solving problems: regulatory delays, bolt-on acquisition targets, software integrations, international expansions, sourcing deeper-pocketed sponsors. This is where Opus excels.
So 2026’s overriding energy transition theme will be “shakeout”. That does not set pulses racing – but it should: falling risks and emerging winners are fertile territory.
We invite you to challenge our ideas by engaging with us at https://opuscf.com/contact-us/
[1] Private equity globally holds $3.7 trillion in unrealized value at end-2025: this is the highest backlog on record. It will take 8 years to clear at current exit velocity.
