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Hey there! 👋
Skander here.
Welcome to our 2nd briefing this week, after the AI & Compute Briefing yesterday.
Today we are breaking down what is happening in ⚡ Grid & Energy: where the grid is jammed, what gets built, how it’s financed, the must-know stats, the winners and losers, the next 12 months, and the names to track.
🌊 Let’s dive in
Want to discuss these topics with Drifties and some of the world’s best investors?
Join our presessions next week:
🤖 AI & Compute (Monday)
⚡ Grid & Energy (Tuesday)
🤝 Scaling & Collaboration (Tuesday)
🌱 Food & Nature (Wednesday)
🛡️ Adaptation & Resilience (Wednesday)
💸 Investment & Impact (Thursday)
🌍 Geopolitics & Global Markets (Thursday)
♻️ Circularity & Materials (Friday)
What’s going on in:⚡ Grid & Energy
A 5-minute crash briefing on transmission bottlenecks, modernization billions, and the great infrastructure awakening
⚡ TLDR
Electricity grids are choking on their own success. EVs, heat pumps, and data centers are plugging in faster than wires can be strung. Aging hardware and slow permitting threaten to bottleneck the transition.
The fix is both-and: build long-lead transmission and firm power, while sprinting with grid-enhancing tech, storage, demand flexibility, and distributed capacity. Policy whiplash raises risk but is tilting capital toward nuclear, geothermal, and utility-aligned DERs.
Clean energy investment is surging, yet grid spending lags by trillions. The crisis is forcing the largest grid modernization in history: smarter operations, storage booms, and VPPs that change how we plan and operate power systems. Bottom line: spend big on steel-and-copper plus software, or accept a permanent traffic jam on the electric highway.
📊 Key Numbers
🇺🇸 United States
2,290 GW: Clean energy projects stuck in U.S. interconnection queues (≈2× the entire existing U.S. power plant capacity). A typical project now waits ~5 years to plug in, up from 3 years in 2015
~70%: Share of U.S. transmission lines that are 25+ years old. Near or beyond their intended lifespan. Many transformers are 40+ years old, a recipe for failures in extreme weather. No wonder U.S. power outages doubled in the last six years compared to the prior six
2x: Weather and grid stress: reported US power outages roughly doubled over the last six years. 80% of outages weather-related
🇪🇺 European Union
$584 billion → $25 trillion: EU grid investment needs by 2050, while global requirements could hit $25 trillion
~1,700 GW of renewables waiting for grid connection across 16 countries; 500+ GW of wind awaiting assessment in 10 countries.
🇨🇳 China
1,350 GW: China’s installed wind + solar capacity in 2024, more than all power plants in the US.
State Grid plans ~¥650 billion of 2025 investment to reinforce and digitize the network.
🌍 Global
~$300B current annual grid spend vs ~$600B needed per year by 2030 to hit climate targets.
$3.3 trillion: Global clean energy investments in 2025, but grid funding only one-third of required levels
137 GW expected annual storage additions by 2030, ~21% CAGR through 2030.
10 years away: Commonwealth Fusion’s SPARC aims for first plasma in 2026; ARC commercial target early 2030s.
📜 Last Year's Narratives
This was the year the grid became the bottleneck everyone noticed. The story was renewable euphoria meets infrastructure reality: record-breaking clean energy deployment collided with transmission systems designed for a different century.
After years of upbeat talk about electrifying everything (cars, homes, heavy industry) the supply side reality bit hard: Wind farms sat completed but unconnected, solar projects faced 10-15 year wait times, and "zombie projects" clogged interconnection queues. Meanwhile, AI data centers consumed power like industrial cities, pushing already strained grids to breaking points.
Still the promise was everywhere: smart grids would solve everything, virtual power plants would add flexibility, and storage costs would plummet.
Again reality looked messier: permitting took longer than construction, supply chain bottlenecks doubled component costs, and utilities struggled with bidirectional power flows they weren't designed to handle.
But there were some silver linings: the EU pledged €584 billion for grid modernization, energy storage markets exploded with 75% annual growth, and smart grid investments were set to more than double by 2030.
🏆 Winners & 🫠 Losers
🏆 The Winners
Transmission builders like MasTec and Quanta Services, riding the infrastructure wave with multi-decade backlogs and pricing power. Firms like Hitachi Energy, Siemens Energy, and ABB’s Power Grids division are sold out for years and raising prices at will, much like turbine makers are doing amid the AI data center boom.
Energy storage companies crushing records with 2+ GW added in Q1 2025 alone, with utility-scale leading at 1.5 GW representing 57% growth year-over-year.
Virtual power plant aggregators, positioned to capture $10 billion in annual grid cost savings by 2030 while addressing 10-20% of peak demand.
The reliability brigade (rebranded): In a twist, old-school backup power made a comeback – wearing green disguise. Diesel generator vendors and gas “peaker” plant operators happily rebranded their units as “resilience” solutions for an AI-and-EV age.
Nuclear and geothermal got real buyer interest. Tech offtakers backed restarts and next-gen projects, while geothermal EGS moved from hype to PPAs and step-by-step playbooks.
🫠 The Losers
Projects with no grid plan: Renewable energy developers who thought they could just build it and the grid would come… got a rude awakening.
Projects without grid connections, trapped in interconnection purgatory with 75% withdrawal rates and costs hitting $400+ per kW for abandoned projects.
Utilities clinging to the status quo: Power companies that doubled down on old playbooks: investing only in fossil peakers, insisting customers curb usage without incentives, resisting renewables saw things backfire.
Startups selling to utility “Goliaths”: Enterprise SaaS might close deals in 6 months, but selling new tech to utilities? Try 3 years. Climate tech startups that set out to disrupt the power sector found themselves mired in pilot projects and procurement hell.
Residential solar tumbles: Over 100 companies bankrupt as net metering reforms slash economics. Investment collapses 36% in H1 2025.
🔮 Next Year's Narratives
The next 12 months will separate the infrastructure dreamers from the grid builders:
⚡ The Great Modernization Rush
Europe's €584 billion grid package launches, while US utilities scramble to deploy $1.4 trillion in energy infrastructure by 2030. Someone definitely tries to blockchain the interconnection queue.
🏗️ The Infrastructure Reality Check
Supply chain constraints force creative solutions: refurbishing old lines, dynamic rating systems, and underground cables become mainstream despite higher costs.
🔌 The Storage Explosion
Battery costs hit new lows below $115/kWh, making long-duration storage economically viable. Virtual power plants scale from demonstration to deployment, with capacity potentially expanding 160 GW by 2030.
📋 The Permitting Revolution
After years of 9-year waits, governments finally streamline approval processes. Fast-track programs emerge: connect in 4 years instead of 8 if you provide flexibility services.
🎯 The Flexibility Gold Rush
Demand response becomes the new capacity market. Smart thermostats, EV charging, and industrial loads suddenly worth more for what they don't use than what they consume. Flex as a capacity class: “distributed capacity procurement” and VPPs move from pilots to multi-GW portfolios aligned with data-center nodes and large load tariffs
💰 The Financing Evolution
Public-private partnerships reshape grid funding, with green bonds and infrastructure funds competing to finance the transition. Consumer bills become the ultimate battleground.
💫 Fusion's make-or-break moment
Commonwealth Fusion's SPARC fires up in 2026, attempting net energy gain by Q1 2027. Success unlocks the floodgates; failure sets the industry back decades.
👀 Who to Watch
Page Crahan | Alphabet’s X (Tapestry):
Real-time grid virtualization and modeling to squeeze more from existing wires through utility partnerships.
https://www.linkedin.com/in/page-crahan/
Nat Bullard | Halcyon:
Data-driven reads on tariffs, interconnection, and cost allocation, with docket mining and sharp trend synthesis.
https://www.linkedin.com/in/natbullard/
Andy Lubershane | EIP:
Pragmatic takes on utility strategy and how capital gets from plan to steel in the ground.
https://www.linkedin.com/in/andy-lubershane-0ab3bb24/
Join our community discussions, we’d love to hear your take.
If you’re passionate about climate solutions, share this briefing with your friends and family.
And don’t forget to join our sessions next week:
🤖 AI & Compute (Monday)
⚡ Grid & Energy (Tuesday)
🤝 Scaling & Collaboration (Tuesday)
🌱 Food & Nature (Wednesday)
🛡️ Adaptation & Resilience (Wednesday)
💸 Investment & Impact (Thursday)
🌍 Geopolitics & Global Markets (Thursday)
♻️ Circularity & Materials (Friday)