Chase & Co. is eyeing Europe’s planned grid overhaul as a significant opportunity to strike infrastructure deals, in a move that builds on the bank’s ambition to dominate grid finance in the US.

Upgrading Europe’s grid is “one of the biggest financing opportunities” in the region’s infrastructure, said Daniel Rudnicki Schlumberger, who heads JPMorgan’s security and resiliency initiative in EMEA. “Institutional capital will move quickly if Europe can stand up a proper framework for grid-operator revenues.”The European Commission has estimated that the cost of developing its electricity networks will exceed €1.2 trillion ($1.3 trillion) by 2040. For JPMorgan, providing the capital needed to pay for such works fits into the banks $1.5 trillion security and resiliency initiative, announced by Chief Executive Officer Jamie Dimon last year.

Wall Street’s biggest bank is framing itself as an integral player in the West’s efforts to fortify essential infrastructure against a backdrop of war, energy crises and a uniquely disruptive technology revolution.

“We think of grid financing as critical infrastructure in the same vein as the defense and critical minerals projects we back, in terms of strengthening Europe’s ability to withstand disruption,” Rudnicki Schlumberger said. “One of the lessons of Ukraine is that grid resilience is as much a security issue as it is an infrastructure investment opportunity.”For now, an ageing grid network is holding both Europe and the US back in supporting everything from data centers, to electric vehicles and air conditioning. In Europe, where decarbonization remains a priority, upgrading the grid is seen as key to moving away from fossil fuels.

The EU is working to finalize reforms needed to support the build-out of its electricity networks, which includes removing obstacles to investment. The EU’s Grids Package is intended to address permitting delays and connection queues, to boost cross-border interconnections and modernize the continent’s electricity infrastructure so that renewable energy can be absorbed rather than curtailed.

Europe’s solar and wind power often goes to waste because of a lack of infrastructure. Insufficient grid capacity means wind power can’t be delivered to the homes and businesses that need it on windy days. And solar power generation on sunny days often exceeds demand, leaving excess generation unused due to a lack of batteries to store the power. And after sunset, Europeans face punitive prices to tap gas.

Gas prices in Europe have tripled so far this year against a backdrop of war in Iran and Ukraine. And as the continent enters winter with historically low gas storage levels, some 500 gigawatts of renewable energy projects are waiting to be connected to the grid, according to JPMorgan.

“I often see projects stall because there’s no grid capacity to connect them,” said Luke Nelson, who heads international sustainability inside JPMorgan’s center for energy and the environment. And with Europe still importing more than half the energy it needs, “each wind farm, solar park and battery built in Europe can help reduce that exposure, as long as it can connect to the grid.”The development will require pairing policy reform with private finance, which Nelson says can bring the capital, expertise and long-term investment needed.

JPMorgan on Tuesday unveiled a grant for the Green Finance Institute, which advises governments on climate and energy policies. The goal is to support an independent initiative that will design and pilot financing structures for smaller distribution operators, innovative grid technologies and cross-border transmission, JPMorgan said.

“Modernizing Europe’s electricity grids is one of the most important infrastructure challenges of the energy transition,” said Rhian-Mari Thomas, GFI’s CEO. “As electricity demand grows and networks come under increasing pressure, unlocking capital for grid infrastructure will be critical to supporting energy security, economic competitiveness and the transition to a low-carbon economy.”