Jason Gray

So PJM capacity prices hit the price cap again, which was a surprise to no one who has been observing the market. As we've written about extensively, the only solution to the cost problem while also getting new supply online is to channel revenues to new entry without providing revenues to the rest of the supply stack. A few notes: * To those talking about extending the price caps: you fundamentally cannot implement a price cap below the cost of new entry and then ask why new entry isn't coming into the market * To those listening to what the IPP and generation associations are saying: they have a clear incentive to keep capacity prices high, so you need to read their comments through that lens. * To those assessing the future revenue potential of generation assets in PJM: you need to be aware that it is politically untenable for prices to rise to the cost of new entry and stay there. * To those blaming datacenters: load growth was coming and this was going to happen no matter what...datacenters just accelerated the underlying reality. Even with sufficient new supply to meet demand, capacity prices STILL have to rise to the level needed to support the new supply. SUMMARIZING: high capacity prices are both necessary to incentivize new generation and unavoidable in an era of load growth. And it is politically unpalatable to allow prices to stay high, but economically impossible for them to stay low. The only solution is to provide direct financial support to new entry outside of the capacity market. https://lnkd.in/gXKXe4Ck

53

3 Comments

SNE Research projects North America's Energy Storage System (ESS) demand to remain structurally robust, driven by grid-scale deployments and increasing AI data-center power needs. Despite strong demand, SNE's analysis indicates that supply constraints will lead to a temporary market contraction from 2025–2027. This is partly due to regulatory restrictions and supply limitations impacting Chinese battery imports, which supplied approximately 65 GWh to North America in 2024, leading to delays or cancellations of many projects from 2025. Consequently, SNE anticipates a significant shift in supply composition, with Korean battery makers' share of the North America ESS market potentially rising to approximately 87% by 2027 as localized capacity increases. The transition to LFP chemistry and prismatic form factors, preferred for ESS, is expected to be gradual as Korean manufacturers adapt existing EV-oriented production lines. SNE estimates that locally produced ESS container systems will reach comparable costs to imports from 2026, with cost advantages widening thereafter.

1

The landscape of developers has increasingly shifted towards independent power producers, comprising ~77% of the 2025 operational and pipeline capacity, while, in 2016, utilities represented ~50% of deployments. Increasingly, utilities opt to sign tolling agreements or build transfer agreements for storage assets with IPPs and developers to mitigate development risk. There is a long tail of >400 asset owners across the US, but the top 15 control ~55% of the operational fleet. The biggest names include NextEra Energy Resources (5GW/21GWh), Engie North America (3GW/2GWh), and AES (2GW/10GWh), according to Wood Mackenzie data.

2

1 Comment

PJM released the results of its annual capacity bidding process yesterday and the results were, as expected, higher energy prices. The final numbers came in at $329.17 per megawatt day, a 22% increase over 2024 which was an 800% increase from 2023. PJM is also slated to retire 15-30% of its generation between now at 2035 meaning the problem will only get worse if something doesn’t give. h/t Grid Status for the chart More from me here: https://lnkd.in/gR6iQTTB #energy #datacenters #ai

15

Growing up in the energy world of the ‘80s as an aramco kid, I saw firsthand how industry legacy shapes our future. Today, I’m thrilled to announce a DCTAV strategic partnership with Young Professionals in Energy DC to pay that legacy forward. We’ve officially partnered to bridge the gap between DC’s seasoned energy giants and the next generation of innovators. This is about more than networking—it’s about the exchange of trusted relationships to lead the global energy transition. Whether you are a senior leader looking to give back or an emerging professional ready to lead: We need you. Let’s go DC! 👇 Comment "MENTOR" below, and I’ll send you the details! #EnergyTransition #DCTech #Mentorship #AramcoKids #Innovation #YPDC #DCTAV DC Tech & Venture Coalition (DCTAV) Young Professionals in Energy DC The Synergos Fund

17

Faster, cheaper, better - that's why Utah Municipal Power Agency chose Mainspring Energy's super efficient, fuel flexible linear generators for their grid scale 48 MW expansion project. Thrilled to support Shannon Miller and the whole team on bringing clean reliable power to the grid. DCVC, General Catalyst, Khosla Ventures https://lnkd.in/gt5nJ8AA

181

2 Comments

U.S. Energy Storage Developers Announce New Grid-Scale Projects Across Multiple States Several U.S.-based energy storage developers announced new grid-scale battery projects this week as utilities and state agencies continue efforts to modernize power infrastructure and support renewable integration. The projects, planned in Texas, California, and the Midwest, will deploy large-scale lithium-ion and next-generation battery systems designed to stabilize electricity supply during peak demand periods. Developers said the facilities will be built near existing transmission corridors to improve reliability and reduce congestion on regional grids. State energy officials welcomed the announcements, noting that battery storage plays a critical role in balancing intermittent renewable sources such as solar and wind. Utility representatives indicated that the new systems will help mitigate outage risks during extreme weather events and enhance grid resilience. Construction timelines vary by location, with several sites expected to begin groundwork later this year pending final regulatory approvals. Industry participants said the projects will create local construction jobs and strengthen domestic clean energy supply chains. Environmental groups also expressed support, emphasizing that expanded storage capacity is essential for meeting long-term decarbonization goals. At the same time, community stakeholders are seeking clarity on safety standards, land use considerations, and long-term operational oversight. The latest announcements reflect continued momentum in the U.S. clean energy sector as public and private entities coordinate to expand infrastructure capable of supporting a more electrified economy. #CleanEnergy #EnergyStorage #EnergyTransition #GridModernization #ClimateTech #Sustainability #Renewables #Infrastructure #VentureCapital #PrivateEquity #ClimateInnovation #Decarbonization #Investment #InnovationEconomy

2

10.8 GW of solar capacity was added in the U.S. last quarter, with more than 80% of all new generation. That’s dominance. Solar is the backbone of new energy buildout. It is faster to deploy, easier to scale, and increasingly manufactured here. The upside for operators and investors is real. Policy may shift around the edges, but the fundamentals keep getting stronger. #SolarEnergy #CleanEnergy #PrivateCapital #Infrastructure

3

2 Comments

How does a guaranteed return on equity of 10% impact utility decisions and incentives to build out the grid the "old" way (more generation, more transmission, more distribution) vs. invest in cheaper, inherently more reliable, and deflationary technologies like demand response, load shifting, and other grid edge solutions? A few weeks ago I was sitting down with a former retail power executive and this topic came up, and it sent me a down a bit of a rabbit hole. Could you calculate the true cost of equity for utilities? Is that number less than 10%? And, if yes, could you use basic finance principles to show how the 120+ year anachronism of forcing rate-payers to give utilities this outsized return directly incentivizes outdated CapEx-first approaches to load growth? AND, would a true cost of equity inherently lead to optimal capital allocation, focusing on profitability? As I was doing this analysis, Dan Gearino of Inside Climate News wrote this excellent article explaining the core elements of this thesis (https://lnkd.in/gzJyNZtW) so I'll skip the qualitative discussion and jump to the analysis. So: WHAT IS THE TRUE COST OF EQUITY FOR UTILITIES? Cost of equity for can be calculated using the Capital Asset Pricing Model, which states that Cost of Equity = Risk free rate + Beta*Equity Risk Premium In other words, what rate of return do I require as an equity investor in order to hold the incremental risk of an equity above the risk free rate? I did this calc over a 30 year time horizon, to match the time horizon of a typical utility investment, so: Risk free rate = Yield on 30 year US treasury = ~3.2% 30 year market return = average return of S&P 500 over 30 years = 8% Equity risk premium = 8.0%-3.2% = 4.8% To calculate Beta for utilities I compared daily returns of the the Dow Jones Utilities Index (DJUSUT) vs. daily returns of the S&P500 going back to ~30 years. Unsurprisingly, Utilities are less volatile than the S&P, so utilities have a beta of about 0.68 over the period, meaning they are less risky to hold, so you require a lower rate of return for holding their equity vs. the overall market. So what is the true cost of equity for utilities today? 4.8% + 0.68*(8.0%-3.2%)=6.5% 6.5% is the cost of equity for utilities today; but if you extend this analysis back to 30 years, the average cost of equity for utilities is even LOWER, averaging 5.8%. (Btw, this lines up perfectly with the 6% Mark Ellis references in the above article) That means utilities are getting an EXCESS RETURN OF 4.2 PERCENT on every dollar of equity they spend building more infrastructure! That excess return is being paid by customer ("rate payers") who's utility bills are legally inflated to ensure this return to utilities. There's a lot more to unpack here, which I'll have to do in future posts, but for now you can access the analysis here if you're curious: https://lnkd.in/gfkvS9sK Michael Lee Doug Lewin Feyijimi Adegbohun, PhD Seyi Fabode

59

23 Comments

Energy markets don’t turn on a dime. Infrastructure moves at the speed of steel not sentiment. Adding renewables makes the grid greener and more volatile. They’re not yet reliable on their own, which is why they must be paired with firm generation. The challenge isn’t ideology, it’s physics. Over the past year, capital has done its job, filtering out the noise. The weaker players are gone. The firms still standing, backed by infrastructure funds and private equity, are building smarter, leaner, and without subsidies. This isn’t a downturn; it’s a reset toward quality. Nuclear is having its “it” moment again, but timelines, permitting, and valuations tell a familiar story. We’ve seen this movie before, remember the hydrogen hype cycle? Execution, not enthusiasm, will decide who wins. Meanwhile, hyperscalers are finally saying what the energy sector already knows: renewables alone can’t power the AI boom. The U.S. already produces 25% of global natural gas, roughly 650–700 GW of capacity. Data centers are adding another 100 GW of demand. The math doesn’t work without balance. The future belongs to those building resilient, diversified infrastructure, capable of powering both the grid and the next wave of AI innovation. #Energy #Infrastructure #AIEnergy #DataCenters #PowerMarkets #NaturalGas #Renewables #Leadership #CapitalMarkets

36

Great piece from Utility Dive highlighting what those of us in the industry already know — the grid keeps choosing renewables because they’re the most efficient, scalable, and cost-effective options on the table. The market is sending a clear signal: renewables work. Policy should continue to reflect that reality. #RenewableEnergy #GridReliability #CleanEnergy #EnergyPolicy https://lnkd.in/gYWYtUAy

5

Dynamic rates, VPPs and active managed charging in California is growing! Thank you to AESP for the recognition and thank you to MCE and California Energy Commission for your continued partnership to deliver This is a great example of delivering advanced active managed charging, coordinated in real time with energy rates, and devices like solar to work in harmony with the energy system. ev.energy have been doing multi-device level distribution level grid coordinated optimization since 2017. We've grown from a proof-of-concept to a commercial multi-device platform, that works with pretty much all EVs plus solar and batteries in the USA. It's delightful to be able to be playing the leadership role at scale in California, helping to make energy bills more affordable, and more reliable, everywhere in the world. Our platform recently crested over 300,000 users, which in the residential space provides a route to ~2 GW of nameplate capacity globally. This big dispatchable resource includes EVs, solar panels and batteries and we can use to help manage the grid - for the benefit of energy companies and ratepayers. Thank you to everyone at ev.energy and all our partners who's contributed to make this impact happen. Looking forward to more impact as we continue to scale programs in the Golden State and beyond!

29

2 Comments

𝐄𝐧𝐞𝐫𝐠𝐲, 𝐂𝐥𝐢𝐦𝐚𝐭𝐞 & 𝐈𝐧𝐟𝐫𝐚𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞 𝐌𝐢𝐜𝐫𝐨𝐠𝐫𝐢𝐝𝐬 𝐄𝐱𝐩𝐚𝐧𝐝 𝐎𝐛𝐬𝐞𝐫𝐯𝐚𝐭𝐢𝐨𝐧: An accelerating push toward community and distributed microgrids shows that regions are betting on energy independence and resilience. Localities increasingly see microgrids not just as backup, but as integral parts of their energy planning. 𝐈𝐦𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧:  Leaders at city, utility, and national levels should assess microgrid strategy on a zone-by-zone basis—evaluating which neighborhoods, campuses, or critical facilities are prime for modular deployment. #Microgrids #EnergyTransition #ResilientInfrastructure #EnergyIndependence #SustainableDevelopment #DistributedEnergy #RenewableEnergy #KSAVision2030 #Vision2030

7

1 Comment

  From CTV Updates The latest news from the ClimateTech world  Three breakthrough technologies just hit major milestones: Energy Vault's 57 MW battery system went live in Texas ahead of schedule, Anax Power is harvesting clean energy from pipeline pressure alone, and Captura opened their first US manufacturing facility for ocean carbon capture. Learn More: https://lnkd.in/gRe2TDYJ  

6

1 Comment

Google has partnered with the Salt River Project utility on a long duration energy storage initiative. ⚡️ As part of the research partnership, Google will provide funding for part of the project being developed for the power grid. Google is migrating toward 24/7 carbon free energy for its global data centers and offices. This is one step in that direction. 👍 Why is this important? Long duration energy storage will likely need to play a key role in our future energy system. In the long run, it can stabilize grids, increase reliability, and help lower emissions. To meet the growing demands of data centers and other large load customers, we will need a healthy mix of energy sources and storage options going forward. 🔋 What do you think of this partnership? Share your thoughts below. ⬇️ Source: Utility Dive 9/10/2025 Disclaimer: This post is made for entertainment purposes only. Nothing in this post constitutes investment advice. #energytransition #energystorage #batteries #powergrid #technology

19

2 Comments

Yup. The energy is now just as key as the GPU. We are seeing a focus on how much intellegience per watt can drive further scale. And it’s not surprising to see Google vertically integrate further.

8

This week made one thing clear: energy markets are no longer just markets — they’re becoming policy problems. As data center load accelerates, governors and federal leaders are stepping in to curb power prices, utilities are investing directly in dispatchable resources, and grid constraints are now showing up on customer bills. For mid-sized manufacturers in Ohio and across PJM, the takeaway is simple: reliability, flexibility, and procurement strategy now matter as much as price. At TPI Efficiency, we help customers translate grid and policy disruption into actionable energy strategies — before volatility shows up on the balance sheet. #EnergyMarkets #GridReliability #PJM #OhioManufacturing #DataCenters #EnergyPolicy #EnergyStrategy #IndustrialEnergy #OperationalRisk

1

1 Comment

The DOE funding pullback is clarifying for climate tech investments, not catastrophic. The Department of Energy's decision to return over $13 billion in unobligated clean-energy funds has spooked founders who built capital strategies around grant timelines. Reality check: this is a policy reprioritization toward fewer discretionary grants and longer timelines, not a sector shutdown. What hasn't changed: projects with real economics still get funded. The Loan Programs Office continues approving disbursements for revenue-generating projects—manufacturing scale-up, grid infrastructure, nuclear restarts. DOE's Mine of the Future initiative and critical minerals programs remain active, supporting technologies that secure domestic supply chains. At MFV Partners, we stayed disciplined while others chased 2021-2023 IRA momentum. Those bets are struggling now. We focused on energy deep tech that works without subsidy dependency—solutions that pencil out regardless of administration. Our portfolio reflects this: Conifer builds rare-earth-free powertrains using ferrite magnets, directly addressing supply-chain bottlenecks while improving power density and enabling cleaner HVAC and mobility applications. SUN Mobility operates battery-swapping infrastructure for commercial fleets across India, Africa, and Southeast Asia—accelerating EV adoption in emerging markets while delivering ROI through better asset utilization. We have several other companies in stealth building similar economics-first solutions that drive real climate impact. What founders should do now: Use grants to derisk R&D where available, but build your scale path around customer pilots and project finance. Treat supply-chain resilience as a product feature. Prove the economics: predictable throughput, demonstrated reliability, and numbers that work with conservative assumptions. The fundamentals haven't changed. Electrification and grid modernization are productivity upgrades—lower costs, higher availability, better payback. That's where capital flows, regardless of headlines. We're continuing to invest actively in energy and electrification deep tech. If you're building solutions with strong unit economics that accelerate the energy transition, reach out. https://lnkd.in/gUfdzRXH https://lnkd.in/gNGm9zyM

49

3 Comments