2026 Power and Utilities Industry Outlook
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Deloitte analysis of Regional Transmission Organization and Independent System Operator websites and their latest forecasts, as of June 2025.
Kate Hardin, Patricia Tuite, Martin Stansbury, and Jaya Nagdeo, “Nuclear energy’s role in powering data center growth,” Deloitte Insights, April 9, 2025.
Remi Paccou and Fons Wijnhoven, “Powering sustainable AI in the United States,” Schneider Electric, April 2025.
Deloitte analysis of S&P Global Capital IQ Pro, Power Plant Units screener, data accessed on July 30, 2025.
Energy Markets & Policy, “Queued up: Characteristics of power plants seeking transmission interconnection,” accessed September 2025.
Steve Bowen, Brian Kerschner, and Jin Zheng Ng, “Natural catastrophe and climate report: Preliminary overview,” Gallagher Re, July 2025.
Firm capacity refers to dependable generation that can be counted on during periods of peak demand or system stress, as measured by market accreditation.
US Energy Information Administration, “Short‑term energy outlook,” Oct. 3, 2025.
Safe harbor refers to Internal Revenue Service (IRS) rules that provide developers with assurance that their projects will qualify for tax credits if they meet prescribed deadlines (e.g., beginning construction or placing a project in service within a set period). Congress, “H.R. 1—One Big Beautiful Bill Act,” July 1, 2025; IRS, “Sections 45Y and 48E beginning of construction notice,” August 2025; The White House, “Ending market distorting subsidies for unreliable, foreign-controlled energy sources,” Federal Register, July 2025; Latham & Watkins, “One Big Beautiful Bill: New law disrupts clean energy investment,” July 8, 2025; Robert Moczulewski, Jiyoon Choi, Matt Kaden, and Beckett Woodworth, “Understanding foreign entity of concern (FEOC) provisions in the OBBBA of 2025,” Baker Tilly, July 30, 2025; McGuireWoods, “IRS Notice 2025‑42 leaves beginning of construction guidance for wind and solar mostly unchanged, but limits 5% safe harbor to low‑output solar facilities,” August 15, 2025.
Ibid.
US Department of Energy, “Resource adequacy report: Evaluating the reliability and security of the United States electric grid,” July 2025.
Ibid.
Mark Lauby and Elsa Prince, “NERC evaluating resource contributions for reliability and capacity supply workshop,” North American Electric Reliability Corporation, June 5 to 6, 2025.
Martin Stansbury, Kelly Marchese, Kate Hardin, and Carolyn Amon, “Can US infrastructure keep up with the AI economy?” Deloitte Insights, June 24, 2025; US Energy Information Administration, “Electric generators plan more natural gas-fired capacity after few additions in 2024,” June 11, 2025.
Abbe Ramanan, “Coal- and gas-fired power plants have a new best friend: Data centers,” Utility Dive, July 25, 2025; Darrell Proctor, “US coal plants get reprieve as market and policies change,” Power Magazine, Feb. 6, 2025.
Deloitte analysis; Clean Energy State Alliance, “Table of state energy storage targets and progress,” November 2024; State Climate Policy Dashboard, “Energy Storage Targets,” accessed September 2025.
Deloitte analysis based on insights gleaned from AlphaSense in September 2025. 8 to 10-hour projects are storage systems designed to discharge continuously for 8 to 10 hours to ensure power is available during critical peak periods.
Construction start is the date when “physical work of a significant nature” begins or at least 5% of total costs are incurred, establishing eligibility for clean energy credits; IRS, “Beginning of construction for purposes of the renewable electricity production tax,” April 25, 2013; Domestic requirement: Projects must use US-produced steel, iron, and a minimum percentage of US-manufactured components to qualify for the domestic content bonus; IRS, “Domestic content bonus credit guidance under Sections 45, 45Y, 48, and 48E,” May 12, 2023; 45U: Nuclear production tax credit for existing nuclear plants; 45Y–Technology-neutral clean electricity production credit, available starting 2025; 48E–Technology-neutral clean electricity investment credit, available starting 2025; Nuclear Newswire, “Nuclear energy tax credits remain—for now—in latest federal budget,” May 23, 2025.
Ibid.
US Department of Energy, “$900 million available to unlock commercial deployment of American-made small modular reactors,” March 2025; Brian Martucci, “TVA is first US utility to apply for an SMR construction permit,” Utility Dive, May 21, 2025; Michele Sampson, “NuScale Power, LLC; NuScale US460 small modular reactor; standard design approval,” Federal Register, May 29, 2025.
The White House, “Ordering the reform of the nuclear regulatory commission,” May 23, 2025.
Arizona Public Service Company, “2024 all-source, request for proposals,” Nov. 20, 2024; Portland General Electric, “Appendix A—scoring and modeling methodology,” July 31, 2025.
State of California Public Utilities Commission, “Decision ordering supplemental mid‑term reliability procurement (2026–2027) and transmitting electric resource portfolios to the California independent system operator for the 2023–2024 transmission planning process,” Jan. 13, 2023; Georgia Public Service Commission, “Order approving joint stipulation between the Georgia Public Service Commission public interest advocacy staff and Georgia power company,” April 2024.
S&P Global, “CIQ pro: Conference chatter: AI, datacenters add to energy demand but can also be grid assets,” September 2025.
Mara, “Hyper-responsive load management system for hyperscalers: MARA and TAE Power Solutions partner for first-of-its-kind grid efficiency platform,” June 2025. Not all data centers—or workloads—are equally flexible. While pre-training is co‑located and interruption‑averse, post-training and some reasoning-heavy inference are shiftable across time and geography. Real-time inference and transactional workloads are time-inflexible; mixed enterprise and co-location facilities (data centers that host multiple tenants or customers or combine workloads from different businesses, not just a single hyperscaler) face contractual limits on how much load can be adjusted.
Dlzar Al Kez, Aoife M. Foley, Faraedoon W. Ahmed, Mark O’Malley, and S.M. Muyeen, “Potential of data centers for fast frequency response services in synchronously isolated power systems,” Renewable and Sustainable Energy Reviews, no. 151 (2021).
Paccou and Wijnhoven, “Powering sustainable AI in the United States.”
Ibid; Jason Plautz, “Nvidia-backed startup wants data centers to be grid assets,” E&E News, July 2, 2025.
Zachary Skidmore, “Indiana regulators approve new rules for data centers seeking grid connection,” Data Center Dynamics, Feb. 25, 2025; Monica Samayao, “Oregon Legislature passes ‘POWER Act,’ targeting industrial energy users like data centers,” OPB, June 6, 2025.
Electric Power Engineers, “ERCOT’s large load interconnection process: Now approved by ERCOT’s board of directors,” April 21, 2025.
LōD, “ERCOT ancillary services and demand response programs for flexible loads,” accessed September 2025.
Ethan Howland, “PJM floats options for fast-track interconnection for shovel-ready projects,” Utility Dive, Oct. 21, 2024.
MISO, “Demand response and emergency resources reforms workshop,” March 5, 2025.
Yusuf Latief, “Google partners with PJM to enhance interconnection through AI,” Enlit, April 11, 2025; Economic Times, “Google to cut AI data centre power use during grid stress in first-ever utility deals,” Aug. 5, 2025.
Subject matter expert inputs from Jian Wei.
Yehui Li, Dalin Qin, H. Vincent Poor, and Yi Wang, “Introducing edge intelligence to smart meters via federated split learning,” Nature Communications, Oct. 8, 2024.
Aaron Mok, “Utilities are modernizing the grid with AI amid growing energy demands,” Business Insider, July 3, 2025.
Gartner, Top power and utilities trends for 2025: Digitally enabled value propositions,” Jan. 6, 2025.
Mok, “Utilities are modernizing the grid with ai amid growing energy demands.”
Grid edge: The point where the power grid interfaces with customers and distributed resources such as rooftop solar, batteries, and electric vehicles; Utilidata, “Utilidata partners with Aclara to bring distributed AI to the grid edge,” press release, March 12, 2024.
American Public Power Association, “Intelligent workflows are reshaping crisis response for utilities,” accessed Oct. 15, 2025; European Utilities Telecom Council, “Artificial intelligence in electric utilities: Enhancing safety, efficiency, reliability and customer service,” July 2025.
North American Electric Reliability Corporation, “Artificial intelligence and machine learning in real-time system operations,” November 2024.
National Association of Regulatory Utility Commissioners (NARUC), “Cybersecurity baselines for electric distribution systems and DER,” accessed September 2025; Herman K. Trabish, “EPRI’s open power AI consortium plans to fuel grid modernization with data sharing,” Utility Dive, April 29, 2025.
NARUC, “Regulators’ financial toolbox: Leveraging software as a service, cloud computing, and artificial intelligence in electric utilities,” April 29, 2025; NARUC, “Essential guide to NARUC alternative cost recovery mechanism resources,” April 29, 2025; Federal Energy Regulatory Commission, “Accounting matters,” Aug. 22, 2024.
Jasmin Melvin, “Electric utilities’ embrace of AI spurs call for governance, risk mitigation,” S&P Global, July 2025.
Jared Anderson, “US gas-fired turbine wait times as much as seven years; costs up sharply,” S&P Global, May 2025.
Grain-oriented electrical steel is a specific product used in transformer cores; Congressional Research Service, “Expanded Section 232 tariffs on steel and aluminum,” September 2025; Congress, “Section 232 national security tariffs on copper imports,” Sept. 26, 2025; Jinjoo Lee, “How tariffs could shock America’s power system,” The Wall Street Journal, Feb. 20, 2025; Brian Martucci, “Transformer, breaker backlogs persist, despite reshoring progress,” Manufacturing Dive, June 2, 2025; Ryan Kennedy, “US raises solar polysilicon, wafer and cell tariffs from China to 60%,” PV Magazine, Feb. 4, 2025; At the time of writing, Section 232 investigations were ongoing for wind turbines and parts, polysilicon and derivatives, and processed critical minerals and derivative products. Antidumping and countervailing duty investigations were ongoing for battery active anode material imports from China and solar cell and module imports from India, Indonesia, and Laos. See: International Trade Administration, “Final affirmative determinations in the antidumping and countervailing duty investigations of crystalline photovoltaic cells whether or not assembled into modules from Cambodia, Malaysia, Thailand, and the Socialist Republic of Vietnam,” accessed July 22, 2025; Kelly Pickerel, “New AD/CVD investigation launched on solar panels from India, Indonesia and Laos,” Solar Power World, July 17, 2025; International Trade Administration, “Preliminary affirmative determination in the antidumping duty investigation of active material from the People’s Republic of China,” accessed Aug. 4, 2025; Shannon K. O’Neil, Julia Huesa, and Gabriela Paz-Soldan, “A guide to Trump’s Section 232 tariffs, in maps,” Council on Foreign Relations, Sept. 2, 2025; Bureau of Industry and Security, “Section 232 investigations: The effect of imports on the national security,” Aug. 22, 2025.
The Cleantech Industry, “Grid modernization sparks manufacturing boom amid rising electricity demand,” Intro-act, March 20, 2025.
Milady Nazir, “CPS Energy meets transformer demand for growing subdivisions,” CPS Energy, Jan. 30, 2024.
Citizen Portal, “Utility firm requests $70M to secure transformer production amid supply constraints,” Feb. 21, 2025.
National Association of State Energy Officials, “The importance and implications of FERC Orders 1920 and 1920-A for state energy offices,” Feb. 13, 2025.
Deloitte analysis; WATT Coalition, “State legislative momentum builds for grid enhancing technologies in 2025,” April 29, 2025.
A regulatory sandbox is a mechanism that provides a structured environment for testing new technologies and business approaches under modified rules to increase the speed of adoption. Grace Relf, Matia Whiting, Lisa C. Shwartz, and Evan Cappers, “Regulatory sandboxes and other processes to expedite utility adoption of advanced grid technologies,” Berkeley Lab, June 2025.
Jasmin Melvin, “’Regulatory sandboxes’ gain traction as states push for utility innovation,” S&P Global, July 28, 2025.
Ibid.
Marlene Motyka et al., “Funding the growth in the US power sector,” Deloitte Insights, Feb. 26, 2025.
Ibid.
S&P Capital IQ Pro data, accessed Oct. 8, 2025 (includes deals in the transaction industries of electric utilities, multi-utilities, renewable energy, and independent power producers and energy traders).
David French, Isla Binnie, and Mrinalika Roy, “AI to fuel bumper year for M&A in US power sector,” Reuters, March 13, 2025; Motyka et al., “Funding the growth in the US power sector.”
Mark Levy, “Private equity sees profits in power utilities as electric bills rise and big tech seeks more energy,” Associated Press, Sept. 27, 2025.
Motyka et al., “Funding the growth in the US power sector.”
Stav Gaon, “Securitized products special topics utility rates: Rising bills can bolster RRB deals,” Academy Securities, July 21, 2025; ScottMadden, “Energy industry update: Power brief,” May 2, 2025. Susan Tierney and Paul Hibbard, “Securitization: Using a well-established tool to support a more affordable energy transition in Massachusetts,” Analysis Group, Sept. 10, 2025; California Public Utility Commission, “Financing order authorizing pacific gas and electric company’s third issuance of recovery bonds pursuant to assembly bill 1054,” Feb. 16, 2024.
FitchRatings, “Neutral outlook for North American utilities in 2025,” Dec. 5, 2024; Baird, “Building momentum: Key drivers for equity issuance in 2025,” Dec. 23, 2024.
US Department of Energy, “Sourcing distributed energy resources for distribution grid services,” December 2024; Department of Energy, “Pathways to commercial liftoff: Virtual power plants 2025 update,” January 2025; Morgan Lewis, “A 2025 update on utility-scale energy storage procurements,” JD Supra, March 2025.
Luis Garcia, “Clean energy tax credit market participants remain bullish,” The Wall Street Journal, Aug. 14, 2025.
Gabi Wasserman, Ingrid Behrsin, John Farrell, Kate Taylor Mighty, and Katie Kienbaum, “Public power handbook,” Institute for Local Self-Reliance, June 2025.
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