The growth of artificial intelligence, combined with the expansion of renewable energy, is set to reshape Europe’s energy sector, according to a new report by credit insurer Allianz Trade.
As it noted in its Energy & Solar report, AI could ‘become the most important growth driver for the European energy sector to date’, both due to the associated increase in energy demand, and the expansion of renewable energies.
However, the sector will face a ‘difficult balancing act’, underpinned by high investments in new capacities and the maintenance of existing facilities, persistent fluctuations in electricity prices, and geopolitical risks.
For example, while wind and solar are making Europe less dependant on fossil fuel imports, the continent still relies on other parts of the world – most notably China – for batteries, solar modules, storage systems and other key technologies.
‘A strategic shield’
“Renewable energies are far more than just a tool for decarbonisation today,” commented Milo Bogaerts, CEO of Allianz Trade in Germany, Austria, and Switzerland. “They are evolving into a strategic shield against geopolitical shocks and the volatility of fossil fuels.
“The recent turmoil in the Middle East has driven gas prices up again. However, the fact that the impact on European electricity markets was significantly more limited than during the 2022 energy crisis shows that with every additional kilowatt-hour from wind and solar energy, Europe is now considerably more resilient to abrupt and sharp fluctuations in energy prices.”
As an example, in Germany, renewable energy accounted for around 58% of total electricity consumption during the first half of 2026, the report noted, while net electricity imports fell by more than 85% year on year to slightly above 1 terawatt-hour (TWh).
AI gigafactories
However, the growth of Europe’s AI networks – with plans for seven European AI gigafactories referenced by Allianz Trade – could heighten demand for any additional energy generated.
“For energy suppliers, this opens up the prospect of new industrial baseloads, long-term power purchase agreements, and additional revenue potential in the grid and storage sectors,” added Guillaume Dejean, industry expert at Allianz Trade.
“In many places, grid bottlenecks and a lack of storage capacity prevent surplus electricity from being used economically. Paradoxically, this puts pressure on precisely those revenues that are needed to finance the energy transition.” Read more here.
