{"id":28961,"date":"2026-04-24T13:46:15","date_gmt":"2026-04-24T13:46:15","guid":{"rendered":"https:\/\/assetphysics.com\/?p=28961"},"modified":"2026-04-24T13:46:15","modified_gmt":"2026-04-24T13:46:15","slug":"europes-energy-transition-meets-its-digital-future","status":"publish","type":"post","link":"https:\/\/assetphysics.com\/de\/europes-energy-transition-meets-its-digital-future\/","title":{"rendered":"Europe\u2019s energy transition meets its digital future"},"content":{"rendered":"\n\n\n\t<section class=\"snk-section snk-section_xs\" >\n\t\t<div class=\"container container-xs\">\n\n\t\t\t\t\t\t\t<h2 class=\"snk-section-headline\">By Dr. James Tyrrell and Miriam Uebel<\/h2>\n\t\t\t\n\n\t\t\t\n\t\t\t\t<div class=\"row snk-textColumns\">\n\t\t\t\t\t\n\t\t\t\t\t\t<div class=\"col col-12 snk-textColumn\">\n\t\t\t\t\t\t\t<div class=\"snk-textBlock\">\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<p>Europe\u2019s energy transition is accelerating, but not uniformly. As countries push to electrify transport, industry, and digital infrastructure, structural mismatches are emerging across the continent. These divergences have the potential to shape investment decisions, influencing long\u2011term return profiles, and increasingly linking the future of clean power to the rise of artificial intelligence.<\/p>\n<p>Let\u2019s unpack this.<\/p>\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<\/div>\n\t<\/section>\n\n\n\n\t<section class=\"snk-section snk-section_xs\" >\n\t\t<div class=\"container container-xs\">\n\n\t\t\t\n\n\t\t\t\n\t\t\t\t<div class=\"row snk-textColumns\">\n\t\t\t\t\t\n\t\t\t\t\t\t<div class=\"col col-12 snk-textColumn\">\n\t\t\t\t\t\t\t<div class=\"snk-textBlock\">\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<h3>Uneven power\u2011price dynamics and diverging national pathways<\/h3>\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<p>We see the shift to low\u2011carbon generation creating fragmented power\u2011price dynamics across Europe, with the UK standing out as one of the highest\u2011cost markets. Shifting power purchase agreement (PPA) prices and increasing price volatility are complicating investment cases, especially where merchant power exposure is unavoidable. In our view, countries\u2019 differing generation mixes \u2013 which dictate flexibility, firm\u2011power requirements, and emissions reduction pathways \u2013 will continue to shape cash\u2011flow visibility for investors.<\/p>\n<p>We don\u2019t see these variations as just being technical. They materially influence where capital flows, how returns are underwritten, and which markets can potentially offer the long\u2011dated certainty preferred by many institutional investors.<\/p>\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<\/div>\n\t<\/section>\n\n\n\n\t<section class=\"snk-section snk-section_xs\" >\n\t\t<div class=\"container container-xs\">\n\n\t\t\t\n\n\t\t\t\n\t\t\t\t<div class=\"row snk-textColumns\">\n\t\t\t\t\t\n\t\t\t\t\t\t<div class=\"col col-12 snk-textColumn\">\n\t\t\t\t\t\t\t<div class=\"snk-textBlock\">\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<h3>Surging demand: EVs, AI and the data centre boom<\/h3>\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<p>Electric vehicles (EVs), electrified heating, and data centres are driving Europe\u2019s next wave of electricity demand growth. Artificial intelligence (AI), in particular, is emerging as the dominant load driver in new and planned data centre capacity. This means AI scaling is potentially directly linked to clean-power returns, although there is uncertainty about the specifics around AI\u2019s future energy needs. As a result, investors now face greater dispersion around long\u2011term price projections.<\/p>\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<\/div>\n\t<\/section>\n\n\n\n\t<section class=\"snk-section snk-section_xs\" >\n\t\t<div class=\"container container-xs\">\n\n\t\t\t\n\n\t\t\t\n\t\t\t\t<div class=\"row snk-textColumns\">\n\t\t\t\t\t\n\t\t\t\t\t\t<div class=\"col col-12 snk-textColumn\">\n\t\t\t\t\t\t\t<div class=\"snk-textBlock\">\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<h3>The grid: Europe\u2019s decade\u2011long bottleneck<\/h3>\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<p>While renewable generation projects and new data centres can be delivered in roughly three years, grid transmission expansion can take up to a decade. We view this mismatch as one of the potentially defining bottleneck in Europe\u2019s energy transition. Projects are increasingly constrained not by capital, demand, or technology but by the pace at which electricity can be moved to where it is needed.<\/p>\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<\/div>\n\t<\/section>\n\n\n\n\t<section class=\"snk-section snk-section_xs\" >\n\t\t<div class=\"container container-xs\">\n\n\t\t\t\n\n\t\t\t\n\t\t\t\t<div class=\"row snk-textColumns\">\n\t\t\t\t\t\n\t\t\t\t\t\t<div class=\"col col-12 snk-textColumn\">\n\t\t\t\t\t\t\t<div class=\"snk-textBlock\">\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<h3>The energy\u2013AI convergence<\/h3>\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<p>In our view, clean power and digital infrastructure are no longer distinct investment universes. Their physical and financial interdependence is deepening as can be seen in a few pieces of anecdotal evidence:<\/p>\n<ul>\n<li>Data\u2011centre siting now prioritises grid cleanliness and power availability.<\/li>\n<li>Big Tech is becoming one of Europe\u2019s largest renewable off\u2011takers, providing credit strength but introducing concentration risk.<\/li>\n<li>Rising demand for data centres is contributing to higher long\u2011term power\u2011price forecasts, supporting stronger renewables returns.<\/li>\n<\/ul>\n<p>Power\u2011constrained FLAP\u2011D markets (Frankfurt, London, Amsterdam, Paris, Dublin) are already redirecting new data centre development toward cleaner, lower\u2011cost Nordic and Iberian grids. This shift represents a tangible convergence of AI infrastructure and renewable\u2011generation hubs.<\/p>\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<\/div>\n\t<\/section>\n\n\n\n\t<section class=\"snk-section snk-section_xs\" >\n\t\t<div class=\"container container-xs\">\n\n\t\t\t\n\n\t\t\t\n\t\t\t\t<div class=\"row snk-textColumns\">\n\t\t\t\t\t\n\t\t\t\t\t\t<div class=\"col col-12 snk-textColumn\">\n\t\t\t\t\t\t\t<div class=\"snk-textBlock\">\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<h3>Navigating opportunities \u2013 and risks<\/h3>\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<p>In our view, the growing demand for energy remains an opportunity for investors, though energy security concerns are obviously gaining increasing prominence \u2013 particularly amid the recent geopolitical backdrop. We see power-price volatility continuing to represent a risk that investors should pay attention to.<\/p>\n<p>AI boom, in our view, will be a major driver of long\u2011term demand growth, even if its trajectory remains difficult to forecast. Emerging sectors that could potentially excite investors include virtual power plants (VPPs), technologies delivering cost efficiencies, and long\u2011duration energy storage.<\/p>\n<p><em><strong>Assumptions, opinions and estimates are provided for illustrative purposes only. There is no guarantee that any forecast will come to pass.<\/p>\n<p><\/strong><\/em><\/p>\n<h2 class=\"author-card__title lg-font-size-4--500 lg-font--expressive\">Dr. James Tyrrell<br \/>\n<span style=\"font-size: 16px; font-family: 'Open Sans', -apple-system, blinkmacsystemfont, 'Segoe UI', roboto, oxygen-sans, ubuntu, cantarell, 'Helvetica Neue', sans-serif;\">Private Markets Research Analyst<\/span><\/h2>\n<div class=\"author-card__teaser-bio\">\n<p>James joined L&amp;G in 2024 as a researcher and has a strong background in technology and innovation. More about James Tyrrell <a href=\"https:\/\/blog.landg.com\/authors\/private-markets\/dr.-james-tyrrell\/\" target=\"_blank\" rel=\"noopener\">LGIM: Dr. James Tyrrell<\/a><\/p>\n<p><strong>Disclaimer:<\/strong>\u00a0Views in this blog do not promote, and are not directly connected to any L&amp;G product or service. Views are from a range of L&amp;G investment professionals, may be specific to an author\u2019s particular investment region or desk, and do not necessarily reflect the views of L&amp;G. For investment professionals only.<\/p>\n<\/div>\n<p><em><strong>\u00a0<\/strong><\/em><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a class=\"snk-btn-link\" href=\"https:\/\/blog.landg.com\/categories\/responsible-investing-and-long-term-themes\/europes-energy-transition-meets-its-digital-future\/\" target=\"_blank\" rel=\"noopener\"><span>Link zum L&amp;G Blog<\/span><\/a>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<\/div>\n\t<\/section>\n\n\n\n\n\n","protected":false},"excerpt":{"rendered":"<p>In this blog, we unpick Europe\u2019s energy transition, assessing how it intersects with the continent\u2019s rapid digitalisation.<\/p>\n","protected":false},"author":100,"featured_media":28964,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_co_authors":[],"footnotes":""},"categories":[],"tags":[224],"type_content":[659,18,35,21],"class_list":["post-28961","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-private-markets","type_content-analysis","type_content-article","type_content-comment","type_content-report"],"acf":{"homepage_featured_article":false},"_links":{"self":[{"href":"https:\/\/assetphysics.com\/de\/wp-json\/wp\/v2\/posts\/28961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assetphysics.com\/de\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assetphysics.com\/de\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assetphysics.com\/de\/wp-json\/wp\/v2\/users\/100"}],"replies":[{"embeddable":true,"href":"https:\/\/assetphysics.com\/de\/wp-json\/wp\/v2\/comments?post=28961"}],"version-history":[{"count":4,"href":"https:\/\/assetphysics.com\/de\/wp-json\/wp\/v2\/posts\/28961\/revisions"}],"predecessor-version":[{"id":28976,"href":"https:\/\/assetphysics.com\/de\/wp-json\/wp\/v2\/posts\/28961\/revisions\/28976"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/assetphysics.com\/de\/wp-json\/wp\/v2\/media\/28964"}],"wp:attachment":[{"href":"https:\/\/assetphysics.com\/de\/wp-json\/wp\/v2\/media?parent=28961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assetphysics.com\/de\/wp-json\/wp\/v2\/categories?post=28961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assetphysics.com\/de\/wp-json\/wp\/v2\/tags?post=28961"},{"taxonomy":"type_content","embeddable":true,"href":"https:\/\/assetphysics.com\/de\/wp-json\/wp\/v2\/type_content?post=28961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}