LIVE MARKETS-Voltage rise: Germany's fiscal boost to crank up its power sector

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

VOLTAGE RISE: GERMANY'S FISCAL BOOST TO CRANK UP ITS POWER SECTOR

Germany's power sector could get a massive boost as Europe's largest economy is cranking up the voltage with billions of euros in fiscal spending that could electrify its economy over the next decade, says Goldman Sachs.

This spending move, which Goldman estimates to be about 2 trillion euros ($2.16 trillion), equivalent of about 35% of the Germany's current GDP, is expected to drive a notable increase in power demand, with the brokerage projecting a 2.5% annual growth in electricity consumption by 2027.

"It (fiscal spending) is likely to drive a re-industrialization of Germany and hence a major pivot in power demand," said Goldman in a note dated 31st March, adding that the country will soon turn into a 'highly attractive market' for power utilities.

Key drivers for the demand boost could be coming from infrastructure investments, the expansion of data centers, and increased electrification, said the Wall-Street brokerage.

To put into context, power demand in Germany is currently the same as in 1990, the year of reunification, adds Goldman.

"We believe that growing electricity demand will highlight the structural under-investment across the German power system and estimate that correcting for this would imply 0.5 trillion euros of investments in power grids, renewable energy and flexible generation," the brokerage added.

E.ON EONGn.DE , a leading energy company and RWE RWEG.DE, a major player in renewable energy, are well positioned to beneficiaries of this demand surge, said Goldman.

"We see E.ON remaining a key play on the modernization of the domestic power distribution grid , while we view RWE as a play on the looming tightness in the German power generation market," the brokerage said.

($1 = 0.9269 euros)

(Rashika Singh)

FOR TUESDAY'S EARLIER LIVE MARKETS POSTS:

U.S. STOCKS MIXED EARLY TUESDAY, BRACE FOR TRUMP TARIFFS- CLICK HERE

AT THE QUARTER POLE, LOW VOLATILITY SETS THE PACE - CLICK HERE

UK TO AVOID RECIPROCAL TARIFFS BUT GROWTH TO FALL ANYWAY - GOLDMAN - CLICK HERE

LIBERATION DAY QUESTIONS: WHO AND WHAT? HOW HIGH? HOW LONG? - CLICK HERE

STOXX REBOUNDS FROM NEAR 2-MONTH LOWS - CLICK HERE

BEFORE THE BELL: EUROPE EYES TENTATIVE BOUNCE AS Q2 STARTS - CLICK HERE

A DEEP BREATH BEFORE 'LIBERATION DAY' - CLICK HERE