Asian economies are projected to invest $5.5 trillion in the energy sector over the next five years, according to Morgan Stanley research. This massive investment will include $1.2 trillion in fresh investment in addition to $4.3 trillion worth of investments that are currently underway. The surge is driven by governments and companies working to strengthen supply chains, support economic growth, and meet rising power demand across the region.
For Indian investors, Morgan Stanley identifies five key beneficiaries in the power generation and power generation equipment sectors. The research house expects these companies to gain significantly as countries increase energy capital expenditure. The optimism stems from rising power demand driven by economic growth, electrification of end-use sectors, emerging loads such as electric vehicles, and green hydrogen initiatives.
In the Indian context, Morgan Stanley expects total power demand to rise 6.75% between 2025 and 2030 to 668 terawatt-hour (TWh). The datacenter sector will see demand of 68 TWh, while non-datacenter demand is projected at 600 TWh. The research house forecasts that renewable energy's share in power supply will gradually increase from 25% in FY27 to 35% by FY31, with the balance met through thermal sources.
Large data center players are increasingly focusing on clean power sourcing, making storage investments inevitable to manage intermittency and variability issues. Morgan Stanley forecasts a 25% CAGR in power consumption from data centers from 2024-27 and a 20% CAGR from 2027-30. Datacenters currently account for approximately 2% of global power consumption and are forecast to add 1.2 trillion units to global power consumption, accounting for 5% of power demand by 2030.
According to Morgan Stanley's projections, about 45% of the additional power consumption from data centers will be consumed in Asia, while 45% will be in the US and Europe will account for the remainder. The research house expects data centers to account for 75% of US power demand growth through 2030, 40% in Europe, and 13% in Asia. This distribution reflects varying adoption rates across different regions globally.
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