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European Power Utilities Boost Focus on Transmission Investment, Storage in H1: WoodMac

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European utilities have increased focus on transmission and network expansion, Wood Mackenzie said on Tuesday in a review of H1 2026, with most of the 9% increase in capital investment among the largest firms, dedicated to this.

The researcher expects this trend to persist for the full year, with the capital expenditure reflecting regulatory support for investment in networks in several places as well as growing opportunities in energy storage.

WoodMac notes a retreat in low-carbon technology spending among oil and gas majors, with BP (BP) having made a highly-publicized strategic shift focused more squarely on fossil fuels.

With the British company's offshore wind assets housed in the Jera Nex BP joint venture and Lightsource currently undergoing a strategic view, it is feasible that the company could exit renewables entirely by the end of the year, the report said.

Equinor (EQNR) and Shell (SHEL) have also been observed cutting back their commitments to low-carbon energy, favoring investments in upstream oil, Wood Mackenzie said.

Regarding TotalEnergies (TTE), Eni (E) and Repsol, the report notes that each has reduced their investment budget but maintained their strategic path overall.

Another trend is the prominence of investments in flexible generation and energy storage, with the most notable move that of TotalEnergies's 50% acquisition of an EPH-owned portfolio in November for 5.1 billion euros ($5.8 billion), paid in stocks.

Elsewhere Enel has increased its battery energy storage targets while RWE is planning more gas capacity in Germany and preparing for more gas-fired power generation growth in the US.

Expectations have grown that thermal generation will retain a larger share for longer in the power mix, especially in the US, to maintain supply flexibility.

Renewables remain at the core of investment plans for most power utilities, with resilience seen in onshore wind and solar despite regulatory uncertainty and grid bottlenecks that make the power harder to deliver.

Other constraints include a saturated supply chain, higher interest rates and a trend of increased curtailment.

RWE is notably expected to overtake Denmark's Orsted as the global leader in offshore wind, after it clinched large contracts in the UK's AR7 auction, giving it an estimated 12 gigawatt pipeline of projects versus its Danish rival's 10 GW.

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