European power companies plot US expansion despite past struggles

Several prominent European power companies, including Spain's Iberdrola, Germany's RWE, and Siemens Energy, are poised for substantial investment and expansion within the United States. This strategic focus is primarily motivated by the "explosive electricity demand" from the burgeoning data center industry, which is causing U.S. electricity consumption to reach record levels. Industry forecasts, such as those from the Edison Electric Institute, anticipate U.S.-regulated utilities will need to invest $1.1 trillion between 2025 and 2029 to bolster power infrastructure. Despite a history of challenges for European firms in the U.S. market, including billions in write-offs and divestitures due to political shifts and rising costs (as exemplified by Orsted's offshore wind setbacks or Iberdrola's U.S. arm Avangrid failing to acquire PNM Resources due to "stiff opposition from local regulators"), these companies see the current opportunities as outweighing past difficulties. Iberdrola plans to direct a significant portion of its 58 billion euro global grid investments through 2028 into the U.S. RWE is allocating 17 billion euros of its 35 billion euro investment through 2031 for U.S. renewables, natural gas generation, and battery storage, while Siemens Energy is investing $1 billion to expand its U.S. manufacturing capacity for power plant turbines and grids. Executives like Iberdrola's Ignacio Galan and RWE's Markus Krebber highlighted the unique market moment and the importance of diversification. The reliable output of natural gas, a key power source for data centers, aligns with the expertise of companies like RWE, which operates one of Europe's largest natural gas power fleets. The U.S. market is seen as offering abundant "greenfield opportunity" and a fragmented landscape ripe for mergers and acquisitions, making it an attractive area for growth for European companies facing energy challenges at home.