With Donald Trump on his way back to the White House, financial advisors are looking to power grids as one of the best bets for investors looking to keep their portfolios green.
Within a day of the U.S. vote, with solar and wind stocks losing value, an advisor with TD Securities “told clients that grids and the equipment needed to build them now represent one of ‘the best-positioned energy transition sub-sectors’,” Bloomberg reports.
“We’re really bullish on U.S. power demand,” said portfolio manager Ran Zhou with New York-based Electron Capital Partners LLC. “And associated with that is long-term carbon-free energy.”
In a mid-month news report, Bloomberg identified a handful of manufacturers of grid equipment that had seen their share prices rise, including Eaton Corp., Rockwell Automation Inc., Ametek Inc., Emerson Electric Co., and Hitachi Ltd. in Japan.
“Companies tied to electrical grids were already outperforming other corners of the green sector well before the U.S. election,” the news agency writes. Now, “money managers say investing in U.S. power and grids is a way to dodge the fallout of tariffs that will hurt other sectors. And as Trump’s protectionist policies look set to force more manufacturing back into the U.S., American demand for energy is set to soar, adding to the investment case.”
Grid activity will also receive a boost from regulatory decisions that have been well under way during the Biden administration. Days before the Bloomberg report, Yahoo! Finance said the U.S. Federal Energy Regulatory Commission (FERC) approved a US$1.8-billion plan by two regional transmission organizations, the Midcontinent Independent System Operator (MISO) and the Southwest Power Pool (SCC), that would unlock 29 gigawatts of new generation.
The two grid operators “identified five 345-kV transmission projects in an area with rich renewable energy resources,” Yahoo! wrote. “MISO expects the projects will begin coming online in 2031.”
Participating utilities will cover $1.3 billion of the cost, after the U.S. Department of Energy kicked in $464 million in October, 2023.
