Goldman Sachs
June 3, 2026
Powering Up Europe: Electrification Driving Power Demand
Sector ReportEquitiesMacro Economic IndicatorsUtilitiesEnergy
Europe's power demand is rising due to accelerating electrification (heat pumps, EVs, industrial electric boilers) and AI-driven datacenter expansion. This trend is expected to create a generational earnings super-cycle for the utilities sector with significant investment requirements through 2030.
Key Takeaways
- 1.European power demand is accelerating, with a +2% YTD increase in 2026 following a +1.5% rise in 2025, driven largely by electrification.
- 2.Three structural factors are driving electrification: the installation of heat pumps in buildings, the rise of electric vehicles (EVs), and electric boilers in manufacturing.
- 3.The combination of electrification, energy security needs, and AI/datacenter growth is expected to trigger a generational earnings super-cycle for the power sector.
Table of Contents
- Disclosure Appendix
- Reg AC
- GS Factor Profile
- M&A Rank
- Quantum
- Disclosures
- Distribution of ratings/investment banking relationships
- Regulatory disclosures
- Ratings, coverage universe and related definitions
- Global product; distributing entities
- General disclosures
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Authors
Alberto GandolfiAjay PatelMafalda PombeiroDhwani KhenwarLawrence Lavizani
Securities
NaturgyENEI.MIEngieRWEG.DEORSTED.COEOAN
Themes
Electrification of Buildings and TransportAI-Driven Power DemandEnergy Security and Infrastructure
Regions
EuropeSpainGermanyItaly