Goldman Sachs: Heatwave Drives Global Cooling Demand, HVAC and Power Grids are Two Major Beneficiaries.

Goldman Sachs pointed out in its latest report that the increasing temperatures, heat waves, and drought risks are driving households, businesses, and governments to expand their investments in "climate adaptation." The most direct beneficiaries are air conditioning systems, but the deeper change lies in the fact that the increase in cooling load will amplify the summer peak electricity demand, thereby driving long-term investments in power generation, transmission and distribution, energy storage, grid automation, distributed solar storage, and building renovation. The bank believes that climate risks are shifting from short-term disruptions to long-term capital expenditure logic, especially in emerging markets in Asia where air conditioning penetration rates are low, population sizes are large, and incomes are still rising. The rise in cooling demand may become an important variable in the future years of electricity demand growth.