Anything but oil, rare earths or sensitive raw materials. To understand where the center of gravity of world geopolitics is moving, we need to look at the power outlet. It is from there that the electricity supercycle starts, shaking markets and offices around the world. Because the truth is simple. Electricity is no longer a simple commodity: it has become the supreme form of power. Whoever controls the light, controls the future. And, paradoxically, just as we are trying to electrify everything, starting with the green transition, light is becoming a scarce resource.
The numbers don’t lie and in Piazza Affari someone has already anticipated the movement. Since the beginning of the year, while the general index is struggling with a still respectable +3.5 percent, the utilities are galloping with a +10. The market has understood that the Energy decree, with its small regulatory stumbles and fears of drops in profits, is just background noise. A distraction for the “eight sisters” of energy Enel, Terna, Edison, Erg, Acea, A2A, Hera and Iren.
A way to make the tax authorities collect an extra billion in three years by increasing IRAP by 2 percent. The maintenance of public accounts is the guiding star of this government. Contributing some of the “super profits” caused by the drop in gas was the shortest way. It is difficult to ask for another sacrifice from the banks. In reality the real game is played on the insatiable hunger for electrons. By 2027, global electricity demand will grow by 3,500 TWh. To clarify: it’s as if every year a new Japan appears on the world map to be fed from scratch.
But who is eating all this energy? It’s not just our washing machines or cars on tap. They are artificial intelligence, green car batteries and all the side effects of the green transition. Every time you ask ChatGpt for something or search for an AI-generated image, you use 10 times the energy of an old Google search. Data centers, these new silicon cathedrals, will double their consumption by 2030.
In the United States they will absorb half of the growth in demand. It’s a gold rush where gold isn’t mined, it’s transmitted via cable. Barclays analysts estimate average profit growth for the sector of around 8 percent per year until 2030 and a total return (dividend plus price increase) of close to 12 percent which could exceed 14 with the growing digital hunger for energy. Data centers, in fact, represent a driver that the market may not have yet fully incorporated, fearing, above all, the recurrence of a technology bubble.
In this scenario, nuclear power – with its biblical times and small reactors still on paper – remains a distant mirage. The present is made of networks, accumulators and a capacity for expansion that struggles to keep up with the wishes of tech giants such as Amazon, Microsoft and Google. As Giuliano Noci says in an article published in Il Sole 24 Ore: controlling power plants today means what it once meant controlling crude oil wells.
It is easy to bet on “where” all this happens and will happen. The map is clear according to a report by the consultancy firm Jll (Jones-Lang-LaSalle): North America remains the first region, around 50 percent of global capacity, and also with the fastest growth, with around 17 percent CAGR (compound annual increase) of supply until 2030. The United States reigns supreme: almost 90 percent of the capacity of the entire area. For Europe, the Middle East and Africa, the expected rebound is expected to be around 10 percent per year, with more than 13 Gw of new capacity. The increase is concentrated in established European hubs such as London, Frankfurt and Paris, and in Middle Eastern markets that are accelerating digital transformation.
It is no coincidence that Flavio Cattaneo, Enel’s CEO, has given the group a change: the new three-year plan envisages 53 billion in investments (especially in the United States). Ten billion more than the previous one to secure networks and renewables. Future margins are played there, on the ability to manage the flow. News that lit up the market, causing the stock to leap towards a new historical record. According to Barclays, which has just raised the target price, it can reach 10 euros, while Equita (buy) goes further, to 10.3. But there are also those, like Alpha Value, who now see it at 11.7 euros.
Absolute record on the stock exchange also for Terna, now firmly placed above 10 euros. The company led by Giuseppina Di Foggia has stopped being a pylon manager to become a champion of international finance. The success of its latest 850 million Green hybrid perpetual bond is proof that international markets believe in its ability to adapt to the changing operating environment. Terna is the beating heart of the system. Its mission is almost philosophical: to maintain perfect balance in a world where energy production (increasingly linked to sun and wind) is by its nature unpredictable.
With 6 billion euros of investments ready to launch – from new submarine connections to digitalised electric highways – Terna is today the guarantor of our security, a company that transforms technical complexity into shareholder value.
Erg represents a unique case of industrial reconversion in the energy sector. The Garrone family was able to abandon oil when everyone was still investing in it, to become a protagonist in wind energy. Now, however, there are new challenges and the Genoese dynasty, according to market rumours, is in a phase of reflection.
The stakes for being at the table are becoming increasingly higher as demonstrated by Enel’s gigantic investment plan. The rumors about corporate reorganizations and possible marriages are not just speculation, but the signal that the market sees the Genoese group as the missing piece for any major European consolidation operation in the Green Power sector.
Then there is Edison, the oldest energy company in Europe (the first power plant in Milan at the end of the 19th century) which is experiencing a second youth. The current narrative is entirely focused on the recovery of competence quotas. In a free market that has finally come to life, Edison wants to play a leading role. To provide itself with the necessary means, CEO Nicola Monti would like to bring the ordinary shares back to the stock market.
Among other things, remedying a situation that the market doesn’t like much. In fact, only savings shares are placed on Piazza Affari. For a long time the stock market has been betting on a takeover bid by EDF, the majority shareholder, to delist the stock. It is no coincidence that in the last year the price has grown by 24 percent. Now the tables have turned. But we don’t like uncertainty and it makes itself felt with a minus 10.
And then there are the “four sisters” of the territories: A2A, Acea, Iren and Hera. Don’t call them simple water and gas distributors anymore. They have become multi-service platforms that play a crucial role in the circular economy and urban resilience.
A2A and Iren are investing heavily in energy storage and recovery, while Hera and Acea (the latter with a watchful eye on the capital) are the ultimate terminals of this transition, those that bring innovation into the homes of Italians. Even in these cases, prices are at or close to historic highs.
In reality it could only be an intermediate step. The Supercycle, in fact, has just started. The challenge is gigantic and capital is needed that only world markets can provide. But one thing is certain: the old distinction between “defensive stocks” and “growth stocks” has disappeared. Utilities today are the engine of technological growth. Without their energy, Nvidia chips would be pieces of inert silicon and Artificial Intelligence a beautiful idea without a voice. Not to mention the green transition which would leave the car with flat batteries. Whoever controls light, today more than ever, holds the keys to the future in their hands. And in this match, Italian companies finally seem to have decided to play attack. Piazza Affari has found the light bulb.
