According to the US investment bank, European electricity demand is expected to grow by 1.5% to 2% annually in 2026 and 2027, before accelerating to 2% to 4% p.a. by the end of the decade. In a scenario of "hyper-electrification," driven notably by the requirements of artificial intelligence-related data centers, growth could reach 5% per year starting in 2030.

This thesis is based on a structural constraint that goes far beyond climate issues alone, as electricity still accounts for only about 20% of European energy consumption, compared to 80% for fossil fuels. For Goldman Sachs, the strengthening of energy security, decarbonization and rising industrial needs should support an earnings "super-cycle" for utilities, provided that investments in grids, interconnections, and production capacities keep pace with demand.

Europe Confronts the Cost of Energy Dependence

The trade balance issue adds a further dimension to this scenario, as the EU remains heavily dependent on energy imports. According to Eurostat, extra-EU imports of energy products reached €336.7bn in 2025, including €218.8bn in crude oil, €56.4bn in liquefied natural gas and €60.1bn in pipeline gas.



Research from ENTSO-E, the European association of electricity transmission system operators, supports this thesis. In its "Ten-Year Network Development Plan 2024," the organization identifies 108 GW of additional economically viable cross-border capacity by 2040, followed by 224 GW of cross-border capacity and 540 GW of storage by 2050.

ENTSO-E further estimates that Europe will need to build more than 100,000 kilometers of new onshore and offshore lines, citing over €800bn in necessary investment by 2050 for cross-border, hybrid, and offshore grids. This makes high-voltage cables, interconnections  and regulated assets obvious bottlenecks.

Cables, Grids, Utilities: The Potential Winners of Electrification

Industrial companies appear best positioned to capture a portion of these investments, as bottlenecks primarily concern the physical equipment required for electrification. France's Nexans emerges as the clearest play on this theme, with a deliberate repositioning toward electrification and solid 2025 results, marked by €6.1bn in standard sales, 8.3% organic growth, a 27.3% increase in adjusted EBITDA, and nearly doubled free cash flow. The group thus offers direct exposure to cables, grids, and transmission without being directly dependent on wholesale electricity prices.

Amongst other European cable manufacturers, Denmark's NKT offers a more aggressive version of the same scenario, with high sensitivity to high-voltage orders, interconnections, and offshore projects. Its high-voltage order backlog reached €10.2bn at the end of 2025, with over €3.5bn in order commitments. Italy's Prysmian, however, remains the pillar of the segment with superior critical mass, €19.65bn in 2025 revenue, and 8.4% organic growth in transmission during Q4.
Schneider Electric, ABB, Legrand, and Siemens Energy also benefit from electrification, particularly through data centers and electrical equipment, though their profiles are less pure plays.