Electrification surge bolsters case for clean energy ETF ACES

Executives from SS&C ALPS Advisors and CIBC Private Wealth said electrification and rising AI data-center demand pushed global clean energy investment to a record $2.3 trillion in 2025, an 8% increase from 2024.

Kyle Kleckner, senior investment analyst at SS&C ALPS Advisors, noted that U.S. electricity demand is rising after roughly two decades of little change. He identified data centers, electrified transport, heating and reshored manufacturing as drivers of higher power needs.

The investment breakdown presented on the webinar showed electrified transport attracted about $900 billion, renewable generation nearly $700 billion and power-grid spending just under $500 billion in 2025.

Jerimiah Booream, managing director and senior investment analyst at CIBC Private Wealth, highlighted a sharp increase in hyperscale cloud and AI operator capital plans. Estimates for hyperscaler annual capital expenditure rose from roughly $300 billion in early 2025 to about $1 trillion today. He added that data centers could account for roughly 10% of U.S. electricity use by 2030, up from a current low-to-mid single-digit share.

Panelists described how storage and supply chains are adapting. Battery storage is being built to stabilize a grid with more variable generation and faster demand swings. Booream pointed out scarcity in natural-gas equipment has raised deployment costs nearly threefold over three years. He also said electric vehicles’ share of global lithium demand has fallen from about 90% to between 70% and 80% as stationary grid storage takes a larger share.

Speakers tied the buildout to geopolitical concerns. Kleckner referenced renewed conflict in the Middle East and the strategic importance of the Strait of Hormuz, through which about a quarter of seaborne oil trade and nearly one-fifth of global liquefied natural gas trade passed in 2025, and said that has increased focus on domestic energy production and storage.

SS&C ALPS Advisors designed the ALPS Clean Energy ETF (ACES) to reflect those industry shifts, according to Karl Zeller, a senior investment specialist at the firm. The ETF targets U.S. and Canadian companies across seven segments, including solar, wind, storage, grid technology and electric vehicles. The fund’s rules require companies to derive more than half their value from clean energy and to already generate commercial revenue, a criterion intended to exclude pre-revenue firms.

The panel cited recent additions to the ACES index to illustrate the screening process. SOLV Energy (MWH), a recent initial public offering, was added after documenting commercial solar and battery-storage projects and becoming one of the largest U.S. providers of those services. Booream observed the company’s margins have widened as project demand increased.

Panelists also noted that capital has continued to flow into the physical buildout of generation, storage and grid infrastructure even as public clean-energy stock valuations faced pressure from higher interest rates, policy uncertainty and trade tensions. They argued that rising electricity demand, expanding AI data-center capacity and reshored manufacturing are factors driving multi-year investment in clean-energy projects and grid upgrades.