The world was already electrifying at a rapid pace. But two developments are now pushing this process into an acceleration that would have seemed unthinkable just a few years ago.
On the one hand, the military conflict with Iran is forcing Europe to fundamentally reconsider its energy supply. On the other, artificial intelligence is consuming so much electricity that an entirely new infrastructure is required to meet demand. Both forces point in the same direction: more electricity, built faster, and preferably clean.
Iran and Europe’s vulnerability
The escalating conflict in the Middle East exposes an uncomfortable truth. After decades of cheap fossil fuel imports, Europe remains vulnerable to disruptions in global energy supply. The rise in oil prices resulting from tensions around the Strait of Hormuz affects not only the pump, but Europe’s overall competitiveness. This makes the urgency to reduce dependence on fossil fuels greater than ever.
European policymakers now draw parallels with the gas crisis of 2022. At the time, the LNG infrastructure was built at record speed. Russian gas was replaced by alternatives such as gas from Qatar, effectively jumping from the frying pan into the fire. Now, attention is shifting toward structural solutions: more renewable generation, better networks, and large-scale energy storage. Electrification is therefore no longer just a climate story, but a matter of strategic security.
AI as a power guzzler
At the same time, a second revolution is unfolding that is driving electricity demand even higher. Artificial intelligence is usually measured in computing power or parameters, but the real metric is energy. Data centers are extremely energy-intensive, and the construction of new facilities is accelerating worldwide at an unprecedented pace.
A seasoned investor in clean energy recently put it succinctly: artificial intelligence is not measured in bytes, but in megawatts, gigawatts, and terawatts. The reason is simple. A gas-fired power plant takes six to eight years to become operational. For nuclear energy, this can extend to twelve years. Solar and wind farms combined with energy storage can be deployed within eighteen months. It is therefore no surprise that virtually all new generation capacity in the United States last year came from renewable sources.
Economics as the decisive argument
What makes this development so powerful is that it does not depend on subsidies or political goodwill. Solar and wind energy are now structurally cheaper than coal and gas. This economic logic was already clear before the Iran crisis, but is reinforced by rising fossil energy prices. The higher the oil price, the more attractive the alternative becomes.
At the same time, prices serve an important signaling function: a high oil price not only accelerates the shift to renewable energy, but also makes investments in storage technology, grid infrastructure, and transport electrification more viable. What began as a climate-driven transition is increasingly becoming a purely economic story, in which the market is doing the work policymakers tried for years to enforce through regulation.
Global electricity demand has grown more rapidly over the past four years than ever before recorded. After twenty years in which energy efficiency largely offset consumption growth, a structural break is now underway. Broader electrification of transport, buildings, and industry, combined with the explosive growth of digital infrastructure, is creating a structural shortage of generation capacity. This shortage is translating into rising electricity prices, both in the United States and in Europe.
What this means for investors
For investors, the combination of geopolitical urgency and technological demand sends a powerful signal. Clean energy was already one of the best-performing investment themes in 2025, and this trend is continuing with greater force in 2026. This is not only about producers of solar panels and wind turbines, but also about companies that build and manage the underlying infrastructure: smart grids, energy storage, and logistics chains.
Compared with the defense industry, the energy transition offers a significantly more attractive long-term profile. The defense sector—fortunately for society—has a strongly cyclical nature. At present, global spending is rising and valuations of weapons manufacturers are extremely high, but history shows that defense budgets tend to fall quickly and sharply after peace agreements are signed. Investors entering at the peak therefore pay a premium for a cyclical high.
Moreover, wars may be started with the weapons of the previous war, but they are won with new, innovative, and increasingly cheaper systems. Established defense companies with expensive, traditional weapons platforms are therefore not necessarily the winners of the next conflict. The energy transition, by contrast, is driven by a structural and irreversible shift: declining costs of renewable energy, increasing electrification, and growing energy independence. This makes it a secular growth story rather than a cyclical bet on geopolitical tensions.
Not a choice, but a necessity
Electrification is no longer a political choice, but an economic and strategic necessity driven simultaneously from two directions. The Iran conflict reminds Europe how vulnerable dependence on fossil imports makes it. The rise of AI is creating an energy demand that conventional sources simply cannot meet quickly enough. Together, they form a secular trend that will only strengthen in the years ahead.
Han Dieperink is chief investment officer at Auréus Vermogensbeheer. He previously served as chief investment officer at Rabobank and Schretlen & Co.