United StatesThis article was initially published in Green Money Journal.
The need for expanded, upgraded and more sustainable infrastructure is creating a range of high-quality investment opportunities.
Population growth, demographic shifts and technological innovation are driving demand for new systems. Existing assets meanwhile need to be made more resilient in the face of rising pressure from climate change, security threats and less predictable usage. At the same time, infrastructure coming to the end of its useable life must be replaced.
Sustainable infrastructure spans the supply of basic resources, such as energy, water and food, as well as services that society relies upon, like healthcare, finance and digital connectivity.
Within this, electricity infrastructure stands out as a critical enabler of modern life and economic growth. The electrical grid forms the backbone of electrification, digitalization, and decarbonization trends. As demand for electricity accelerates and more renewable generation comes online, the grid must expand and become smarter.
This article explores what “the grid” really is, why it is under unprecedented strain, and how long-term structural trends — from ageing assets to climate adaptation — are driving compelling investment opportunities. We also highlight a case study to illustrate how investors can gain exposure to this transformative theme.
1. What is “the grid”?
Electrical grids are the vast, interconnected systems that deliver electricity from where it’s generated to where it’s consumed.
At its core, the grid comprises three main components: generation, transmission and distribution. Generation includes traditional power plants and renewable sources like wind and solar. Transmission involves high-voltage lines and substations that move electricity across long distances. Distribution brings power to end users, in homes and businesses, via transformers and lower-voltage lines.
Investors have multiple entry points into this ecosystem. Utilities own and operate the grid, often under regulated frameworks that are intended to help manage return variability. Industrial manufacturers supply the “picks and shovels” used to build out the grid. These include transformers, cables and switchgear, as well as an increasing number of components for decentralized generation, such as batteries. Software and technology firms also play a growing role, enabling smart grid functionality, predictive maintenance, and cybersecurity.
2. The opportunity
The investment case for grid infrastructure appears to be supported by several long-term structural trends.
Firstly, demand is soaring. Global electricity consumption is expected to double by 20501, fueled by the electrification of transport, heating and industry. As economies grow and digitalization accelerates, the grid must expand and become more flexible.
Secondly, ageing infrastructure is reaching breaking point. In the US, the average power transformer is over 40 years old.2 These assets (and others across the grid) are operating beyond their intended lifespan, increasing the risk of outages and inefficiencies. Replacement and upgrade cycles are no longer optional – they’re critical.
Thirdly, grids must become more resilient to the impacts of extreme climate-related weather events. Heatwaves, storms and floods are testing the reliability of electricity grids just as energy demand surges, especially for cooling and heating. For instance, air conditioning and fans are ~10% of global electricity use and air conditioning demand could triple by 2050 absent stronger efficiency standards.3 Recognizing this urgency, political support for grid modernization is strong and bipartisan. In the US, the Infrastructure Investment and Jobs Act has earmarked ~$29 billion for the electricity grid,4 while Europe needs ~€584B of grid investment by 2030 per the European Grid Action Plan.5 These are multi-decade commitments to energy security, climate resilience and decarbonization.
From a financial perspective, grid infrastructure may present opportunities for both resilience and growth. Regulated utilities can offer inflation-linked revenue models, while equipment suppliers and digital enablers are positioned to benefit from margin expansion and scalable business models. As logistical, economic, and climate-related pressures evolve, interest in investment appears to be increasing.
3. Stock Example: NextEra Energy
The specific securities identified and described are for informational purposes only and do not represent recommendations.
NextEra Energy6, headquartered in Florida and listed on the New York Stock Exchange, is the largest clean energy company in the United States, with a market capitalization exceeding $160 billion.7
The company operates through two primary businesses: Florida Power & Light (FPL), a regulated utility serving approximately 12 million people, and NextEra Energy Resources (NEER), which develops renewable energy projects, battery storage and smart grid solutions across North America.8 This structure combines a regulated utility – with potential for more predictable revenue streams – with a renewables developer, resulting in a diversified asset base. NextEra has set a target of achieving net-zero emissions by 2045, supported by detailed implementation plans.9 NEER accounts for nearly 20% of all renewable energy development in the US, with a growing pipeline of renewable energy projects that could present future opportunities.10
We believe the company’s growth is supported by regulatory frameworks, project economics and growing electricity demand, including from data centers enabling the AI boom. Over the past two decades, NextEra has reported annual earnings growth11, and targets ~10% annual dividend growth through at least 2026.12
To learn more about Impax’s Global Infrastructure ETF, please visit: etf.impaxam.com
1 U.S. Energy Information Administration: International Energy Outlook, October 11, 2023.
2 Utility Business, “Transformative Times: Update on the U.S. Transformer Supply Chain,” July 12, 2022.
3 IEA: Air conditioning use emerges as one of the key drivers of global electricity-demand growth, May 14, 2018.
4 S&P Global: The Opportunity for U.S. Infrastructure, September 17, 2021.
5 European Commission: In focus—EU investing in energy infrastructure, October 15, 2024.
6 NextEra Energy was 3.47% of the Impax Global Sustainable Infrastructure Fund as of 12/31/25. The holdings referenced pertain to the predecessor mutual fund. On 2/2/26, the Impax Global Sustainable Infrastructure Fund was converted into the Impax Global Infrastructure ETF. Fund holdings are subject to change.
7 Bloomberg, as at 22 December 20258 NextEra Energy: Company Overview, undated web page (accessed Dec 2025)
9 NextEra Energy: Zero Carbon Blueprint Update (PDF), June 14, 2022. Company target covers Scope 1 and 2 emissions. Scope 1 emissions are direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by an organization (e.g., emissions associated with fuel combustion in boilers, furnaces, vehicles). Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling.
10 S&P Global: NextEra tops leaderboard of renewable projects planned in energy communities, May 22, 2023.
11 Annual earnings growth refers to the percentage increase in a company’s net income over one year. Earnings growth is not a measure of future performance.
12 NextEra, Investor Relations releases, February 2024 and February 2025.
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