EXECUTIVE SUMMARY
TAKIN' CARE OF BUSINESS
The theme of this issue of the ScottMadden Energy Industry Update is “Takin’ Care of Business.”
Energy demand continues to grow at a level and pace that one executive terms as generational. Policy momentum, growth in data center and advanced manufacturing, and expanding end-use electrification are all contributing to this trend. At the same time, significant investment in critical energy infrastructure is needed to support grid reliability and flexibility.
The utility industry is “taking care of business” as it works to bridge this critical “speed-to-power” challenge. To meet this growing demand while ensuring reliability, companies are managing massive capital spending, supply chain constraints, and rate impacts. A major part of this supply response includes renewed momentum behind nuclear power, including conventional plant restarts, capacity expansion, small modular reactors, and microreactors.
For modern utilities, balancing rising energy needs, supply chain constraints, and affordability underscores that keeping the lights on means takin’ care of business. Below, we preview the topics in this edition of the Energy Industry Update.
HIGHLIGHTS FROM THIS
ENERGY INDUSTRY UPDATE
Utility Themes
While identifying long-term trends can be challenging amid market shifts, the current environment highlights several common themes. Across almost every subsector, companies are focused on rising capital spending, maintaining affordability, upgrading aging grid infrastructure, and serving rapidly growing loads.
Large Loads and the Speed-to-Power Challenge
The rapid growth of data centers and other large loads continues to dominate industry headlines. A recurring phrase is “speed-to-power”—the ability to deliver electricity at the scale and pace that these new energy demands require.
It remains unclear how quickly—and at what cost—this gap between soaring energy demand and available supply will be resolved.
AI: An Update
For the AI industry, power availability, efficiency, and reliability are now core development priorities, shaping site selection, design, time to market, and self-build considerations.
Growing token use and higher-density AI racks are expected to intensify power needs, requiring stronger governance and improved efficiency. Expanding large computational loads is also prompting the study of reliability risks from load drops.
Recent Developments in Nuclear Power
For several years, the energy industry has viewed development of advanced nuclear technologies as a prime opportunity to meet the growing demand for dispatchable, emissions-free baseload energy. This momentum has been enhanced by ambitious government programs.
A wide range of opportunities are emerging, all in the hope of expanding commercial nuclear capacity.
Electricity Affordability in Focus
Some recent commentary on energy affordability has drawn broad conclusions that are national in scope and specific in cause. While customer concerns are real, a review of recent studies shows that affordability pressure is becoming more infrastructure-driven, more regionally differentiated, and more dependent on regulatory choices.
SEPA Portugal Factfinding Mission and Lessons from a Blackout
ScottMadden joined SEPA on a factfinding mission to Portugal to study how a grid with high levels of inverter-based resources operates, with lessons informed by a recent blackout. The trip highlighted that high levels of inverter-based resources require changes in grid operations, with greater emphasis on visibility and flexibility.