Season 8, Post 27: Staying cool and chilling out

“I love your country but hate the fact you have no air conditioning” was the comment that an American friend of your author shared with him when visiting London from the States recently. Some 40% of the world’s population now has access to air conditioning. However, global distribution is highly uneven, and with record temperatures being recorded across much of the planet, many probably wish they owned a unit. The politics of cooling will only become increasingly important.

New analysis from the International Energy Agency suggests that more than 80% of the planet’s population “experiences cooling needs during at least part of the year.” This may come as little surprise to most Americans or Japanese, for around 90% of households in both countries own air conditioning units. By contrast, average European penetration is 23%. In the UK (to the dismay of not only Americans, but locals too), it is just 4%, four times lower than levels in India..

If only it were as easy as just installing more air conditioning units. Globally, grids are straining from a combination of increasing energy demands (data centre expansion is an obvious culprit) and ageing infrastructure (most grids in the western world are several decades old). In many developed countries, questions about climate change and energy efficiency cloud the debate. Elsewhere, the price of electricity and who gets access are often front of mind. Government budget constraints are another issue.

Solutions do, fortunately, exist. Governments and utilities globally are accelerating grid infrastructure upgrades. Global warming is just part of the rationale. Smarter and more cyber-resilient grids are themes we have been discussing since 2022. Quanta Services, a speciality grid infrastructure contractor, reported a record backlog of $53bn last week, indicative of “broad-based organic demand”, per its Chief Executive.

At a practical level, think of additional air conditioning capacity as being only part of the answer. Complementary measures exist such as optimising existing cooling systems, deploying portable cooling units in the warmest areas, improving ventilation and airflow and even installing temporary blinds or solar shading to reduce heat gains. If all else fails, grab yourself a cold drink and find some shade.

5 August 2026

The above is provided for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Any forward looking statements are based on assumptions that may change. The views expressed are solely those of the author at the time of writing. Heptagon Capital is an investor in Quanta Services. The author of this piece has no personal direct investment in the business. This article should not be relied upon for investment decisions. Past performance does not predict future returns, the value of investments and income from them can fall as well as rise.