Morgan Stanley: Global power demand growth could exceed expectations, with roughly half of the new demand not yet priced into the market.

Morgan Stanley’s latest research report points out that the "Three A" forces—AI agents, rising demand for air conditioners, and industrial reshoring—are collectively driving global power demand into a super cycle. The bank has raised its global power consumption growth forecast for 2025–2030 by 10%, projecting global electricity use will hit 36.3 trillion kilowatt-hours (kWh) by 2030, roughly 15% higher than market consensus. Around half of the power demand driven by AI agents, Asian industrial expansion, and new air conditioners and heat pumps has not yet been priced into related companies’ valuations. Morgan Stanley notes power demand growth is no longer driven solely by AI data centers. Global industrial power use is expected to rise from 11.1 trillion kWh in 2025 to 13.1 trillion kWh in 2030; global cooling power demand is forecast to grow from 2.9 trillion kWh to 4.1 trillion kWh over the same period, with a 7% compound annual growth rate (CAGR), outpacing the overall global power demand growth rate. Regionally, Asia is set to contribute around 64% of global incremental power demand between 2025 and 2030. The U.S. power supply gap is also severe: Morgan Stanley projects a 43 gigawatt (GW) power shortage for U.S. data centers by 2028, with some demand potentially spilling over to Asia, driving local power infrastructure investment. On the investment strategy front, Morgan Stanley believes pricing power in the power market is shifting from equipment suppliers to power generators, grid operators, and natural gas infrastructure owners. The bank is bullish on stocks including Bloom Energy, Solaris Energy, and China Yangtze Power, while adding Korea Electric Power Corporation (KEPCO) and Tata Power to its avoid list.