Grids and electrification: the key to unlocking renewables' potential

The renewable energy sector has seen an unprecedented acceleration in recent years, driven by geopolitical tensions - most notably the war in Ukraine - which have brought to the fore the issues of energy sovereignty, government targets for decarbonisation, and the rise in demand for electricity, which has increased notably with the deployment of AI and the need to power data centers. But this dynamic comes with new challenges: adapting networks, managing episodes of overproduction or low prices, and accelerating the modernization of infrastructure.
In this context, investment opportunities are multiplying, particularly in energy storage infrastructure, electricity grids, and equipment, which are becoming essential levers for the energy transition. It is now a question of supporting players capable of taking advantage of this new investment cycle, while remaining attentive to the risks and opportunities associated with price volatility and changes in public policies.

Key Points 

• A global acceleration of renewables, driven by solid fundamentals
• Energy systems undergoing profound transformation
  • Europe: the challenge of integrating green energy
  • United States: a favourable context driven by an increase in electricity demand
  • Asia: : contrasting growth, which remains dominated by China
• Redirection of capital towards power grids likely to accelerate in 2026

Conclusion 

Europe continues to deploy renewable energy at an impressive rate. But this dynamic creates tensions and without a much faster electrification of uses and the implementation of appropriate infrastructure, episodes of overproduction, curtailment and negative prices are likely to increase.
In this context, the most experienced developers and investors, who will be able to take advantage of the opportunities presented by these challenges, and who secure their revenues via long-term PPAs, remain largely protected from these fluctuations, while renewable energies benefit for the most part from competitive costs, thus reducing their dependence on subsidies.
Thus, it would be relevant for public policies to evolve accordingly, gradually redirecting financing towards electrification and grid modernization, a movement necessary to absorb more renewable generation. In the long term, this rebalancing of public support will strengthen the resilience of the energy system and provide the sector with a more stable and sustainable growth path.

The information given reflects Mirova's opinion and the situation at the date of this document and is subject to change without notice.