Electricity abundance
To me it seems clear that more energy, specifically in the form of electricity generally means more prosperity. This is true across a range of markets and time periods. A direct result of this link is that more electricity should and will be used.
Since you and I know this, it makes sense to put money where our mouth is and bet on this electricity abundant future. The only real question is where in the electricity market to place these bets?
The 3 layers
The electricity industry across the world is broken down into three main segments:
- Generation (converting energy rich materials into electrons)
- Transmission (moving these electrons around)
- Usage (converting these electrons back into useful work)
All of these segments are huge in themselves. Generation is a ~$250B market in the US every year. Utilities are increasing prices, more generation is coming online, and the system continues to grow. The most notable thing however is that there is a main area that is currently more ignored than the rest, and that is transmission.
Transmission ignorance?
Getting electrons from one place to another is not particularly sexy. It involves a mess of transformers, high voltage (HV) lines, substations, underground cabling, constant repairs to poles, tree pruning, massive transmission towers, and general babying of the overall system to prevent against outages.
Because of this headache, there are a huge amount of bottlenecks to electricity transmission that have not been solved. One of the most notable is congestion, simply meaning there is not enough power line capacity to transmit the huge number of electrons demanded, causing a lack of available power. Even if the electricity can be generated, it is often the case that it cannot arrive to the end use site in an economically fashionable way, causing huge price hikes.
This problem will continue to get worse. Without building new HV lines and the subsequent transformers, switches, and the rest of the stack, new generation will not be able to be capitalized upon. This is a serious issue that utilities are running into now.
This is kind of perfect for us, the somewhat informed investor. When demand for more energy continues to rise, demand for transmission will follow, and companies working on smoothing these bottlenecks will have a field day.
How to capitalize on transmission
Let’s get into the nitty gritty. What about transmission can actually be invested in?
Firstly, there are your major utilities (PG&E in California, ESB over here in Ireland). These companies often have the task of final electricity delivery to home or commercial settings, which is a high op-ex business. It’s also incredibly messy since people have to constantly be fixing poles after storms, upgrading LV transformers, installing meters, and the like.
Next, one can turn to transformer companies, the large suppliers being Siemens and GE Vernova. A good business to be in to say the least. Both are up >50% in the last 6mos.
Another approach is to look to Infrastructure and transmission builders, the main player being Quanta Power. These companies are crucial when looking to build new transmission. I don’t see demand doing anything other than increasing for these guys.
The final outlook that I believe is promising is with power electronics companies. Guys doing inverters, converters, and rectifiers. Cool companies like Wolfspeed and XP Power are pushing the envelope here.
An example portfolio
Now for the fun part. To put my money in. As an experiment, I’ve created a simple portfolio and invested ~5% of my net worth into it. The details are as follows. These positions were obtained as of 19/09/25.
Growth:
- Quanta Services (PWR) 20%
- Fluence Energy (FLNC) 20%
Backbone:
- Siemens Energy (ENR) 25%
- GE Vernova (GEV) 25%
Moonshot:
- Wolfspeed (WOLF) 10%
Riskier bets
To me, the cooler companies are the ones innovating in the space. Heron Energy is building transformers using modern power electronics. LineVision is doing grid intelligence software. These are where the ball is rolling. Time to get in while the iron heats up.
The main way I aim to invest in this industry is to become a part of it. I’m still trying to find out the best place in the stack for a company to slide in. This market is super promising to me, and I can’t wait to ride the waves that are already beginning to form.