Five Trends Shaping Energy Infrastructure in 2026

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Less than a year ago, on April 28 2025, a voltage oscillation cascaded through Spain’s aging power grid, plunging 56 million people into darkness for nearly six hours. The economic cost: an estimated €1.6 billion. It is an example of risks that come from decades of underinvestment colliding with a grid never designed for today’s decentralized, renewable-heavy energy systems. It was one of the starkest warnings yet.

After 15 years of declining electricity consumption, Europe stands at an inflection point. Power demand is growing again — driven by factors like digitalization, industrial electrification, adoption of electric vehicles and hotter temperatures. Yet the continent’s energy infrastructure is straining under the weight of chronic underinvestment and grids that predate the energy transition by decades.

It creates both a challenge and an opportunity. Europe may need to double infrastructure investment over the next decade to avert a power crisis, according to expert estimates. System-critical assets Energy Infrastructure Partners invests in, like transmission grids, flexible generation and renewable energy platforms, are meanwhile becoming more important than ever as scarcity drives higher returns across the electricity value chain.

Our Five Trends Shaping Energy Infrastructure in 2026 map directly onto the three megatrends we invest in: digitalization (demand growth, data centers), security (grid reliability, energy independence, competitiveness) and decarbonization (renewables scaling, molecule transition). Together, they illustrate why energy infrastructure investment continues to become more important year after year.¹

1. European Grids: The Trillion Euro Infrastructure Imperative

With over 40% of distribution infrastructure exceeding 40 years old, Europe’s power grids are the oldest in the world. They were never designed for today’s bidirectional, decentralized energy system. Connecting offshore wind farms on the supply side with data centers and electric vehicles on the demand side is a use case that the original architects of these grids never imagined.

Experts estimate Europe needs to invest as much as EUR 1.4 trillion in transmission and distribution grids alone until 2035, representing a 60-100% acceleration over the past decade. The amount includes not only the buildout of new grids but also the cost of maintaining the existing networks. It will require a concerted effort from lawmakers and investors in the private sector.

Europe’s association of grid operator ENTSOE counts 180 new transmission projects and 51 storage projects across the continent in 2026. Cross-border transmission capacity meanwhile must double by 2030.

Grid infrastructure is the backbone of everything. Without it, renewable energy cannot reach demand centers, data centers cannot be powered and energy security falters. At EIP we have continued to invest in transmission grids since the beginning, both at home in Switzerland and increasingly internationally through portfolio companies like Swissgrid and Fluxys, which recently transformed into a transmission group for both molecules and electrons. — Tim Marahrens

2. The Demand Awakening: Europe’s First Growth in 15 Years

For the first time since 2010, European electricity demand is structurally on the rise. Driven by digitalization, industrial electrification, electric vehicle adoption, heat pumps and hotter summers pushing more households toward air conditioning, the International Energy Agency reports that Europe returned to demand growth in 2024.

Demand for electricity globally grew 4.3% in 2024 — the fastest increase recorded outside recession recovery years. European demand is set to grow as much as 2% annually by 2030, accelerating to as much as 3.5% later in the decade. This shift is structural, not cyclical: It reflects fundamental changes in how energy is consumed, from molecules to electrons.

Data centers are one driver of this new demand. Experts project European load demand in this sector to grow from 10 gigawatts in 2023 to approximately 35 gigawatts by 2030 — a compound annual growth rate of roughly 20%. The trend creates long-term demand for European electricity, with many data centers signing 10-20 year power contracts that provide stable, long-term offtake insulating infrastructure investors from shorter-term economic cycles.

EIP portfolio companies like Repsol Renewables have a key role to play by bringing new supply online in innovative ways. In Aragon, Spain, the company is developing the country’s largest hybrid power project, combining an 818 megawatt Escatrón combined-cycle plant with 805 megawatts of wind capacity. By sharing a single grid connection point, the project maximizes infrastructure efficiency while stabilizing supply — and will provide over 1.6 gigawatts of renewable and backup power to a major data center being developed nearby. — Peter Schümers & Jaime Sanjuán

3. Molecules in Transition: From Russian Gas to a Multi-Molecule Future

After decades of dependence on Russian gas, Europe is severing its last ties. Over the last years the RePowerEU Directive defined the European Union’s long-term strategic plan to reduce dependency on Russian fossil fuels. More recently European Union’s 19th sanctions package banned Russian liquefied natural gas imports starting in April 2025, with long-term contracts phased out by early 2027. In their place, an Atlantic energy axis is taking shape, anchored by US liquefied natural gas and supported by import terminals now running at record capacity.

But 2026 is not just about replacing Russian gas — it’s about building the infrastructure for a multi-molecule future. The EU’s Hydrogen and Gas Market Package also comes into force this year, unlocking the first dedicated hydrogen transport corridors and accelerating the conversion of existing natural gas pipelines to carry hydrogen at a fraction of new-build costs. Carbon capture networks are simultaneously moving from concept to reality, with national frameworks preparing pipelines to carry carbon dioxide from industrial clusters to offshore storage sites beneath the North Sea.

EIP portfolio companies like Fluxys sit at the center of this transition. Its liquefied natural gas terminals around Europe have become gateways of European energy security, while its pipeline network lies on identified hydrogen routes connecting Belgium to Germany — both key markets for the company. Fluxys infrastructure is also strategically positioned to connect with carbon dioxide transport routes to storage sites in the UK and Norway.

The molecule infrastructure of 2026 must handle today’s continuing natural gas load as well as security needs while building tomorrow’s hydrogen and carbon management systems. Companies that can manage this complexity are positioned to capture value across the entire energy transition. — Marcel Schuster

4. Renewables Trade Up: The Rise of Integrated Portfolios

Over the past two decades, renewable energy investments have been a cornerstone of infrastructure strategies, offering long-term, stable, and contract-backed cash flows. The gradual reduction of subsidies and the growing exposure of renewables to wholesale power price volatility, however, have introduced complexity that demands new strategies.

The rapid expansion of renewable energy capacity — particularly solar power plants — has contributed to an increase in zero and negative power price settlements in energy markets, as well as heightened price fluctuations. These trends are especially evident in Europe, where S&P Global Energy reports that offtake agreement prices in countries like Spain and Germany remain significantly below the cost-based levels of solar.

To address these challenges, a new paradigm for stability has emerged. At it’s center are portfolio optimization measures to create flexibility combined with constant trading on the market side. Another strategy hinges on vertical integration and internal route-to-market strategies on the business side. 

Players capable of managing this exposure internally are positioned to achieve higher risk-adjusted returns, particularly when they have an internal route to market that benefits from the natural hedge provided by vertical integration. Inside EIP’s portfolio, Alpiq’s fleet of hydropower plants and increasing move into battery systems and Plenitude’s distict vertically integrated model are two examples of portfolio companies where we see strong – and increasing – value. — Carlotta Piantieri

5. The Industrial Power Price Gap: A Call for Competition

European industrial electricity prices remain double US levels and 50% higher than China — a gap that has widened dramatically since 2019, when EU prices were only 50% higher than the US and 20% above China.

The impact is already visible. Years of elevated energy costs have hollowed out parts of Europe’s industrial core. Chemical giant BASF began shuttering units in Germany in late 2024 while boosting investments in China; Dow announced the closure of three of its most energy-intensive European plants. Corporate insolvencies in western Europe approached 200,000 in 2024, the highest in over a decade, with energy prices cited as a key driver.

With the recent fall in gas prices since the 2022 energy crisis, it is now a crucial moment for European companies and energy-intensive industry to take a long-term view on where to base their operations. Triggered by increasing geopolitical uncertainty, learnings from the energy crisis and historical underinvestment, Europe is now committed to breaking the vicious cycle that can come with high power prices.

Governments will prioritize attractive conditions and stable energy systems to capitalize on demand growth and mobilize an unprecedented amount of new investment. System-critical energy infrastructure that can deliver reliability, security and competitiveness will serve as the foundation of Europe’s long-term viability and preserve competitiveness on the continent. — Caterina Mattle²