Electrifying Europe Reinforces ‘New Growth Era‘

Research evidence excerpt

Electrifying Europe Reinforces ‘New Growth Era‘

Update

July 17, 2026 11:46 AM GMT

Morgan Stanley & Co. International plc+MUtilities | Europe Robert Pulleyn

Equity Analyst and Commodity Strategist

Electrifying Europe Reinforces Robert.Pulleyn@morganstanley.comMorgan Stanley Europe S.E., Paris Branch+ +44 20 7425-4388

Arthur Sitbon, CFA

Equity Analyst'New Growth Era' Arthur.Sitbon@morganstanley.com +33 1 42 90 71-03

Morgan Stanley & Co. International plc+

Key Takeaways Sarah E Lester, CFA

Equity Analyst

We expect a positive read-across for the Utility sector from future policy Sarah.Lester@morganstanley.com +44 20 7425-0551

direction supporting electricity networks & clean power generation. Marina Fuentes Juan

Draft EU electrification plan aims to increase the share of electricity in final ResearchMarina.Fuentes.Juan@morganstanley.comAssociate +44 20 7425-2268

energy consumption from the current 23% to 46% by 2040. Arthur Descazeaud

Research Associate

Utilities is a key beneficiary via required investment in electricity networks and Arthur.Descazeaud1@morganstanley.com +44 20 7677-1282

clean power generation to facilitate this increase.

Utilities

We estimate the plan implies 2040 Electricity demand of ~5,000 TWh, ~50% Europe

Industry View Attractive

higher than our current forecasts, at a 2025-40 CAGR of 4.9% (MSe 2.1%).

Even progress towards this target strengthens the 'New Growth Era' for Utilities,

with our preferred EU exposure to this theme in Orsted, RWE, Elia, and E.ON.

Electrifying plan: The EU followed its 22nd April AccelerateEU Response to Energy

Crisis with the indicated Electrification plan. The EU targets a doubling in the share

of electricity in final energy consumption from the current 23% to 46% by 2040,

with next steps in 4Q26.