@JosephPolitano / appears on apricitas, apricitas, apricitas, apricitas, apricitas, apricitas, apricitas, apricitas
Demand from AI, heavy industry, heating, and transport is driving load growth but also outstripping growth in power infrastructure—leaving America with an increasingly large electricity gap that’s driving up prices.
Texas is seeing by far the fastest electricity growth of any region in the United States—total power generation in ERCOT, the state’s main utility interconnection, has already risen nearly 30% above pre-COVID levels and is projected to reach 57% above those levels by 2027.
the US is in the midst of a massive increase in domestic battery production, with output rising 37% over the last year and tripling since late 2019. Many of those battery factories have been redirected from EV production, where adoption has slowed as federal incentives are cut, to utility-scale production.
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A merchant power producer that owns the Texas and PJM grids the AI buildout is flooding into, selling into scarcity pricing and locking hyperscaler nuclear deals as demand outruns supply.
Their decision to exempt computers and other data center inputs from tariffs while hitting key electrical infrastructure like wires, transformers, and batteries further exacerbates the energy crunch.
Natural gas will still meet the majority of Texas’ load growth over the next two years, but solar alone will cover 40% of new demand while wind will cover another 9%.
2025 saw the largest year-on-year increase in US solar generation on record, with total solar power rising 28% to 389TWh. That’s despite the Trump administration cutting subsidies to wind and solar production, cancelling permitting approvals for major projects, and imposing tariffs on many of the sector’s key inputs.
This variability makes short and long-duration batteries an obvious and necessary complement to solar panels.
The only place where America undoubtedly has an investment boom is in computers and data centers , which remain completely exempt from Trump’s tariffs.
since the US collected more than $150B in taxes under executive orders now deemed retrospectively illegal, we could see a rather massive refund to importers
despite rising AI usage across the board, most tech companies are not seeing a massive reacceleration of their gross revenue.
physical capital expenditures among the hyperscalers of Meta, Alphabet, Amazon, and Microsoft alone will comfortably exceed $600B this year, up from $370B last year. Alphabet alone expects its spending to reach $175B-$185B in 2026
The vast majority of those AI-related computer and parts imports come from three countries—Taiwan, home of TSMC, Mexico, a leading center for computer assembly, and Malaysia, a significant chip & computer parts supplier. Imports from Taiwan in particular have skyrocketed, rising 670% over the last three years alone.
prices are now rising at the second-fastest pace on record, only trailing the worst of the COVID-era semiconductor shortages.
commercial power consumption will rise another 2.6% this year and 4.3% in 2027 . It is also hyperconcentrated in the electricity grids of Texas's ERCOT and the mid-Atlantic's PJM
The state has just passed SB79, a bill that allows more housing construction near transit stops throughout the state , representing one of the largest upzonings in the modern United States.
Web search portals (like Google) and computer systems designers (like IBM) have led the decline, while computer infrastructure providers (like Amazon Web Services) have held up the strongest.
Web search portals (like Google) and computer systems designers (like IBM) have led the decline
California's high cost of energy also means that despite the tech industry's concentration in the Bay Area, few data centers are planned in the state itself , pushing more of the AI ecosystem to places like Virginia, Oregon, and Texas.
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