JPMorgan Sees ‘National Security Risk’ in Old Grid Networks
(Bloomberg) -- JPMorgan Chase & Co. says aging, run-down grid infrastructure now risks undermining security goals, with everything from extreme weather to cyberattacks posing a growing threat.
The Wall Street bank, which laid out its analysis in a report seen by Bloomberg, describes the current decades-old grid network as a “national security risk.” Against that backdrop, investments that make grid infrastructure more resilient are becoming “increasingly attractive,” according to JPMorgan.
The comments come as investors, policymakers and consumers struggle to keep up with the daily shocks playing out in energy markets as the Iran war — now in its fourth week — rages on. Any long-lasting dent to supply would coincide with an historic surge in demand for energy, with potential bottlenecks in overwhelmed grids adding to risks.
All of that adds up to “major tailwinds for grid investments,” Sarah Kapnick, author of the report and JPMorgan’s global head of climate advisory, said in an interview.
It’s “a massive investment opportunity,” she said.
On the one hand there’s artificial intelligence, electrification and the re-industrialization of developed nations, which on their own account for “massive growth in electricity demand,” Kapnick said.
“Add to that the energy volatility from geopolitics, which means you may no longer want to rely on oil and gas deliveries from partners in the Middle East and North America and instead want to shift towards building out new renewable technologies that allow for energy self-sufficiency,” she said.
JPMorgan, which collects fees advising utilities and energy clients on grid-related deals, has made clear it views investments in critical US infrastructure as key to its role as the country’s largest bank. In 2025, it unveiled a $1.5 trillion, 10-year plan designed to ensure enough capital gets channeled into areas spanning semiconductors, data centers, medicines and critical minerals. Such investment is crucial to safeguarding supply chain resilience, economic growth and competitiveness, according to the bank’s analysis.
When it comes to the grid, JPMorgan’s Security and Resiliency Initiative is about trying to “figure out where are the bottlenecks that are being ignored,” Michael Johnson, vice chairman of SRI at JPMorgan, said in an interview. And to “apply capital to try and fix those is eminently more useful” than just saying “we need a lot of grid investment,” which is “obvious and not helpful.”
In the US, part of the challenge is that “we have a national highway system that is federally managed and organized. But for the grid, each state or city has built power to serve its customers, and so it’s a patchwork,” he said. “When a national answer doesn’t exist, we need to look at grid resilience on a regional level.”
Key technologies to unlock grid capacity quickly
Global grid spending rose to $480 billion last year from $300 billion in 2020, JPMorgan said in the report, citing data from BloombergNEF. But over the decade through 2035, some $5.8 trillion of investment globally is expected, of which 12% will be for digital-related capital expenditure, the bank said.
In the US, grid investment is expected to hit roughly $1 trillion through 2035, JPMorgan said, referring to BNEF data. By comparison, the figure is around $1.1 trillion for Europe and roughly $2.6 trillion for Asia Pacific, with China representing more than two-thirds of all grid investment in the region, the bank said.
Lack of grid capacity is already weighing on the pace of US data center development, as well as on corporate growth and investment plans. With the stakes as high as they are, grids are “undergoing a fundamental reframe” in the eyes of investors and policymakers from “aging legacy assets” to strategic infrastructure, Kapnick said.
(Adds reference to fees generated from grid deals, in eighth paragraph.)
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