The US energy market is attracting massive interest from firms both within and outside the country's traditional energy sector, as power consumption hits record levels. The industry group Edison Electric Institute stated in July that US regulated utilities alone are projected to spend 1.1 trillion dollars between 2025 and 2029 to meet surging power demand.
European utilities and power producers have a checkered history regarding US investment, having been forced in some cases to write down billions of dollars or divest assets that suddenly became undesirable due to political shifts and rising costs. Nevertheless, they remain among the most eager to invest in power generation assets, transmission infrastructure, and other areas of the aging US electrical grid.
"The timing is absolutely unique, and I think we are ready for it," said Ignacio Galán, Chairman of Iberdrola, at the CERAWeek conference in Houston last week.
Iberdrola has designated the US as its primary growth area and plans to allocate a significant portion of its 58 billion euros (66.46 billion dollars) in grid investments through 2028 to the country.
The Spanish energy giant is not alone. Germany's RWE announced earlier this month that it will earmark 17 billion euros of its 35 billion euro investment through 2031 for the construction of renewable energy facilities, natural gas generation, and battery storage in the US, while Siemens Energy is investing 1 billion dollars to expand its manufacturing capacity for power plant turbines and grid equipment in the US.
A TURBULENT HISTORY
Despite the investment enthusiasm for the United States, many European firms have recently suffered setbacks while attempting to expand in America.
Denmark's Ørsted has recorded several billion dollars in write-downs since 2023, primarily due to delays and cost overruns related to offshore wind projects in the US. Others, such as France's EDF and British energy majors BP and Shell, spent years building renewable energy projects in the US but have recently sought to sell part or all of their assets as strategic priorities shifted.
Iberdrola, through its US subsidiary Avangrid, spent three years trying to close a deal to acquire the utility PNM Resources before canceling it in the face of strong opposition from local regulators, who claimed the transaction's risks outweighed the promised benefits to state taxpayers.
The political preferences of different US administrations have forced European companies to adapt. US President Donald Trump has been an adversary of renewable energy, particularly offshore wind, favoring fossil fuel and nuclear generation instead. This prompted last week's announcement by TotalEnergies that it would swap offshore wind concessions for financing to develop oil and natural gas assets in the US.
George Bilicic, Vice Chairman of Investment Banking at Lazard, said the scale of the current opportunity in the US eclipses any concerns European firms and their shareholders might have regarding past challenges.
"The United States needs investment," he said. "There are abundant opportunities for new projects, and the energy market remains fragmented. If you want to pursue M&A, there are plenty of opportunities."
(1 dollar = 0.8727 euros)
(Reporting by David French and Laila Kearney in Houston; editing by Liz Hampton and Nia Williams; edited in Spanish by Patrycja Dobrowolska)
