Latest supporters of the energy transition are neither hippies nor dreamers

The world is more complex though and not only have several States in the US, led by Democrats and Republicans alike, deployed more (China-imported) solar and batteries than ever before, but American money is now flowing massively into renewable energy platforms in Europe: Apollo, Brookfield and KKR all announced 10-digit investments in offshore wind in 2025, at odds with the rest of the investor universe, and this week, KKR announced the acquisition of 50% of a 1.2 GW onshore wind and solar portfolio from TotalEnergies, in a deal valuing the portfolio at EUR 1.8 bn.

Why this boost of investment?

“When there is a gold rush, sell shovels”. The first level of analysis is that the gold rush is AI and the data centres are the shovels. The absolute enabling asset, though, is one step more remote: the electricity that the data centres need in huge quantities. Tellingly, the AI majors themselves take a stock-market hit almost every time they announce another wave of data-centre spending, as largely commented by analysts this week about SpaceX, a reminder that it can be safer to sit on the shovel side than the goldmine side.

High multiples on investment have been realised by the early movers in the US, developing “powered lands” on which data centres can be installed. No one wants to miss the European wave now.

The other gold rush using the same electricity shovels, which seems to have been forgotten in the hype of AI and data centres, is the electrification of transportation. Almost all new trains and buses are electric and the share of electric cars in new vehicles sold, which was 2% in 2020 in Europe, is now higher than 20%. The trend may lead to full electrification within the next decade.

So electricity it is, but why renewables?

Two earthquakes have shaken the energy market post-2020: wars and batteries.

• Starting with the wars, in Ukraine and Iran, the volatility in the oil and gas market has been a much stronger advocate for using local resources such as wind and solar than the (much weaker these days) fight against climate change and net-zero commitments. Solar panels are arguably still largely bought from China but can then operate for 35 years at fixed cost and without any diplomatic interference. The first reaction from the Danish Minister to this week’s award of 1.8 GW of offshore wind was not about climate or the low cost of electricity. He was first and foremost celebrating “a huge day for Denmark’s freedom”.
• Batteries then: with sharp price decreases in 2024 and 2025 and despite the recent rebound, they now have the capacity to address the intermittency challenge in a way that remains cost-competitive.

With the fundamentals of the market back, the attractiveness of the long-term stable revenue that renewables offer, with large upfront investment and cash flows for several decades that don’t depend on the price of gas or commodities shined again in the eyes of investors.

The market impact of those investments?

Being at the heart of renewable energy finance for more than 15 years, we have lived through the ups and downs, and the last three years have certainly been on the low end of the cycle.

This wave of investments therefore happened at the best moment possible for the industry. Directly first, as those billions of direct investments enable critical projects to get built and help recycle capital that will be used to develop the next ones. Indirectly as well, with hundreds of smaller funds and investors analysing the move from the mega-funds, assessing the profit that can be generated from renewables, building confidence within their investment committees and ultimately investing as well.

The multiplier effect is even more crucial as the investment criteria of the US mega-funds remain focused on partnerships with the largest energy players in deals that are often structured, leaving a large segment of the market available (and hungry) for other investors.

The new positive vibe that we can feel in the sectors that have been recently targeted by mega-funds (offshore wind, onshore platforms) is the result of a variety of factors, ranging from stronger tariff schemes to grid upgrades. The move of the mega-funds is both its evidence and its catalyst.

What is coming next?

Coming from the first wave of believers that our energy needed to be urgently decarbonised, I aligned my career goals with the 2050 net-zero targets of most European countries. Close to half-way, here we are in the summer of 2026, knowing that the temperatures, drought and fires that feel like hell today will become very average by the time we retire. Here are a few thoughts about what lies ahead of us:

• Climate change alone doesn’t seem to be a reason that is good enough anymore for public opinion, politicians, developers and investors to accelerate the development of renewables. Not even job creation. Energy independence, speed of deployment, production of cheap electricity and trigger for new electricity usage (including AI and EV) are.
• World finance follows profitable investments, including in solar and wind, paying limited heed to populist statements from far-right political leaders, which have a real power of nuisance at home but can’t guide where the money is invested abroad.
• If the electricity is the shovel of the data centres’ gold rush, which are themselves the shovels of the AI gold rush, the electricity generation assets themselves need their own “shovels” to shine: grid, ports, vessels, solar and BESS supply chains… Massive investments are required there as well and the public sector needs to provide investable schemes to unlock the increasingly limiting bottleneck.
• Batteries today don’t answer 100% of the intermittency challenge. Moving from 1h to 2h, then 4h, 6h and even 8h batteries certainly helps match the production and demand curves, in a way that calls for a complete rethinking of the past limitations of off-grid renewables. It is not enough just yet to offer cost-competitive behind-the-meter 24/7 clean electricity generation. The answer already exists as a combination of (i) complementary sources (wind + solar + hydro), (ii) demand response with a price incentive to consume it when the electricity is produced, and (iii) larger grid integration, super-grid and inter-grid trade.
• The concentration of money in the pockets of a few mega-funds, most of them in the US, will make them instrumental to the capital-intensive renewable energy sector and other related infrastructure. Much of that capital is long-dated insurance money: KKR and Apollo, among others, channel large pools of insurance liabilities into renewables, whose stable, long-life returns are a natural match – KKR’s deal with TotalEnergies this week was itself made through an insurance account.

Two of the largest power utilities in the world told me recently that they were seeing themselves as medium-sized players, which I initially took as a joke or a provocation. They genuinely mean it though, in comparison with the mega-funds, which will either partner with them, buy them or ignore them, and on whose behaviour the future of electricity generation will depend. Fortunately, those new rainmakers are increasing their exposure to renewables, bringing the rest of the investors behind them, and releasing the capital needed to build more (clean) shovels for the AI revolution.