Investors should show “strong preference” for renewable generation-focused groups such as RWE and Orsted that are set to benefit from “higher for longer” energy prices and massive spending on electrification, said Goldman Sachs.

Analysts from the investment giant in a note on European utilities highlighted the German and Danish groups along with Portugal’s EDP as ‘buys’, as it hailed wind and solar’s long-term “deflationary” potential to slash energy prices.

Goldman Sachs released its research as it forecast energy costs will peak early next year at around €500 ($495) a month for a typical European family, a 200% increase on 2021 levels that adds up to a €2trn surge in bills across Europe.