EXECUTIVE SUMMARY
COMPLICATED
The theme of this issue of the ScottMadden Energy Industry Update is “Complicated.”
Energy policy has shifted dramatically: some policies have reversed, such as tax incentives for renewables, while other policies have been turbocharged, such as federal support for nuclear power development and reduced barriers to permitting. At the same time, AI grows as a force for both energy use and control and dominates discussion across the global economy, including utilities.
To complicate things further, companies have identified massive capex needs for energy infrastructure, which could challenge their ability to scale to meet growth needs.
Putting all of the “to-do’s” together in this rapidly growing and changing industry makes it complicated indeed. Here we preview the sections in this edition of the Energy Industry Update.
HIGHLIGHTS FROM THIS
ENERGY INDUSTRY UPDATE
Permitting and Siting Reform
The Trump administration has advanced sweeping permitting reforms—enabled by its declaration of a national energy emergency—that prioritize rapid environmental reviews and approvals.
Courts and states have also weighed in, limiting the scope of permitting and preempting local opposition. This may serve to accelerate certain energy projects with potentially lasting consequences for permitting and siting.
Large Loads and Rate Design
Large electrical loads are growing rapidly in the United States and Canada. One forecast estimates that data center growth could add up to 90 gigawatts to U.S. power demand, with manufacturing adding a potential 20 more gigawatts by the end of the decade.
Utilities and regulators are considering the potential impact of this growing demand, and the infrastructure to serve it, in terms of grid performance and the costs for other customers. Utilities are exploring a range of options to ensure costs are borne by cost-causers and not shifted to other customers.
AI and Energy
Artificial intelligence (AI) adoption is growing and focusing attention on rising energy demand while the technology remains in early stages of deployment.
At the same time, the energy industry is exploring AI’s potential to boost efficiency, reduce costs, and enhance reliability.
Scaling Capital Projects
Energy utilities are accelerating core infrastructure investment to address rising demand from electrification, manufacturing, and data centers.
Execution challenges—from equipment to labor availability to interconnection—are driving multi-project strategies, asset alternatives, and workforce development to sustain construction delivery.
Grid Flexibility
The North American grid is evolving with the integration of more solar and wind resources, growing electric demand and electrification, tighter reserve margins, and more seasonal variation in resource performance. Industry leaders are focusing on operating flexibility to ensure both reliability and resilience.
The variety of resources, both supply and demand, and their capabilities makes deployment of these “flexibility” programs complicated.
