Energy hunger and energy transition: what environmental technologies have to do with AI

The term “AI” will remain an integral part of any market outlook in 2026. Behind the rapid advances that appear to be continuing unabated are billions in investments in data centres, chips, and, above all, one thing: electricity. The bottleneck is increasingly shifting away from pure computing power towards energy supply. Or as Microsoft CEO Satya Nadella has succinctly put it:

“The biggest issue we’re having now isn’t chips — it’s power”

For investors, this development opens up new perspectives: the AI boom is not only a technological question, but also an infrastructure issue. Wherever data centres are built, electricity generation, networks, and storage are required. Many of these solutions come from the field of renewable energies and environmental technologies. This is because AI needs one thing in particular – a large and reliable supply of electricity.

The new bottleneck: data centres, grids, and the race for electricity

Why is electricity increasingly becoming a limiting factor? AI systems should not only be smart, but also capable of continuous, large-scale computing – training, inference, cooling, and backup systems run around the clock. As a result, there is a race for grid connections and short-term generation capacity. “Speed to power” is becoming a decisive factor: those who can access electricity more quickly can ramp up computing power faster and scale new applications.

Renewable energies play a central role in this context. They can often be implemented more quickly than conventional large-scale power plants and can be efficiently combined with storage solutions. The decisive factor here is not which AI model will prevail in the long term. The data centres are being built – and electricity and grid connections are needed regardless. In other words, companies involved in energy supply and efficiency are supplying the shovels for the gold rush.

Reporting season: positive tendency in the energy segment

A brief look at the most recent reporting season illustrates the structural trend. The renewable energy sector has recently shown increasing stability, which has also been reflected in the share price performance. At the same time, differences within the sector remain significant.

Companies involved in grid expansion and related suppliers continue to show robust development. The grid infrastructure in Europe and the United States is outdated, which means that utility companies, which normally operate very cautiously, are making – and indeed, having to make – enormous investments. Another positive factor is the general increase in electricity demand, as a large part of this is covered by renewable energies.

Other segments, such as offshore wind, are characterised by greater uncertainty. Selective equity selection and active management therefore remain important.

Technology companies are becoming energy players themselves

The major tech companies and players in the AI business are increasingly becoming active themselves. In September, Meta (Facebook) announced its intention to enter the energy trading market.  As one of the largest consumers of energy, it makes sense for the company to position itself more actively in this market

Alphabet (Google) has recently also sent a clear signal. With the acquisition of renewable energy developer Intersect for about USD 4.75bn, the group secured not only existing projects, but above all the development pipeline for future solar and wind farms. Intersect has specialised in providing renewable energy for data centres for years and had already collaborated with Alphabet in the past.

The remarkable aspect here is not so much the deal itself as its strategic thrust: the focus is shifting to access to future electricity supplies. It is no longer just about current capacities, but about control over projects that will only come online in the coming years – all geared towards meeting the electricity needs of the company’s own AI infrastructure in a long-term and sustainable manner.

Conclusion: AI is driving electricity – electricity is driving investments

The AI boom is a global megatrend that cannot be reduced to a single key figure. However, one consequence is clear: without electricity, there can be no AI. For investors, this means looking at AI not only through the lens of chips and cloud software, but also considering the infrastructure behind it – generation, grids, and storage technologies. In this context, renewable energies and environmental technologies are increasingly coming to the fore because they provide fast, scalable solutions to growing electricity demand.

 

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