JSS Green Planet’s Jacquelin: The strategic value of electricity
Recent geopolitical tensions have affected energy prices and infrastructure, and that has reinforced a central lesson for policymakers: energy security is increasingly synonymous with national sovereignty.
Reshoring, energy security, and electrification have evolved beyond mere cyclical market themes. They are the primary defence against global instability and are reshaping global capital allocation for investors.
Capital is flowing into the physical foundations of growth, including grids, power systems, and critical materials. We believe this marks the beginning of a sustained cycle for real assets, of which companies and sectors exposed to the green transition are expected to benefit.
Globally, active data centre capacity has reached approximately 100 gigawatts and is expected to double by 2030. One gigawatt of power can supply a city of roughly one million people. Generating that electricity requires approximately three million solar panels or 300 onshore turbines.
The pipeline of planned data centres represents electricity demand comparable to entire countries. This scale forces operators to secure long-term renewable power purchase agreements.
The age of electricity
The 21st century is being shaped by the strategic importance of electricity. The energy transition involves more than decarbonisation goals – it concerns national sovereignty and economic resilience. Nations are accelerating renewable buildouts and modernising aging power grids, many of which are old and unequipped for decentralised, intermittent supply.
Meanwhile, global electricity demand is rising, driven by electric vehicles (EVs), industrial automation, and digital infrastructure. This shift necessitates smarter networks, increased storage capacity, and high-voltage transmission to balance regional supply, triggering large infrastructure investments.
Navigating the electrification value chain
To capture this opportunity, investors must look beyond broad themes and into specific value chains. Electrification is a sequence of interlinked industrial steps, each offering distinct opportunities.
The electrification value chain starts with extracting and processing critical materials like copper or aluminium. Midstream companies then enable the processing and recycling of metals essential for batteries and hardware. Further downstream, manufactures of wind turbines and specialised providers of sustainable energy solutions support the large-scale deployment of renewable generation capacity.
Once generated, electricity must then travel via high-capacity cables to reach various conversion units. Copper specialists provide the conductive backbone required for turbines and grid systems.
At the system level, power conversion technology is critical for grid stability. Manufacturers of transformers and high-voltage direct current systems required to inject renewable electricity into high-voltage grids at scale. Transmission operators then manage these “arteries” to move power across borders.
The convergence between digitalisation and electrification
Engineering specialists physically deploy the lines, turning plans into tangible reality. Storage acts as stabiliser for these complex power systems. Battery leaders provide grid-scale systems that smooth supply volatility. Finally, this power reaches end users across digital infrastructure, industrial plants, and private households.
Additionally, specialised companies optimise power distribution within data centres, where reliability is mission critical. Other companies enable rapid solar adoption across markets, and semiconductor leaders supply the power electronics essential for the EV revolution.
The convergence between digitalisation and electrification is most evident in modern data centres. The AI boom has transformed these facilities into a new class of critical infrastructure. Hyperscalers are projected to spend over USD 620 billion in capital expenditure in 2026. Data centres sit at the intersection of generation, transmission, and power management.
The power of positioning
These structural shifts are increasing market dispersion and creating a favourable environment for active management. Identifying sustainable alpha requires understanding where specific bottlenecks or structural competitive advantages exist within the value chain. Resilience and electrification now define the core of global economic policy.
Governments and corporations are committing significant capital to develop essential infrastructure for long-term growth. Companies that are exposed to the green transition are not just environmental leaders, but the architects of a more resilient, self-sufficient global economy.
The companies strategically positioned to benefit from these shifts are essential to reshoring, energy resilience, and the electrified economy. In an era where real assets are paramount, value chain expertise is the key to unlocking global investment value.
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