The environment for building new infrastructure has worsened significantly. Opposition has moved beyond localized "Not In My Backyard" (NIMBY) sentiment to a more generalized, intractable stance of "Build Absolutely Nothing Anywhere Near Anything" (BANANAS), paralyzing development.
Utilities are unwilling to fund new nuclear plants due to the high risk of budget overruns. The predicted 'renaissance' will only happen if the government steps in to backstop these projects, absorbing the excess financial risk to incentivize construction and ensure energy security.
To overcome local opposition, hyperscalers are creating novel utility contracts that have zero financial impact on local ratepayers. They agree to guarantee a return on the utility's specific capital expenditures, ensuring data center costs are not passed on to other customers.
The energy trilemma (clean, stable, abundant) has been reordered. Previously, 'clean' was the top priority. Now, driven by massive demand and geopolitical instability, the market and policymakers prioritize securing 'more' energy that is 'stable,' even if it means delaying decarbonization goals.
A market anomaly exists in the utility sector. The valuation premium for the fastest-growing utilities has decreased, even as their growth differential over average peers has increased. This allows investors to buy superior growth at a relatively lower price than in previous years.
Despite record-high commodity prices, mining and energy companies are hesitant to invest in new production. Shareholders, scarred by past value destruction from over-investment, are demanding capital discipline. This investor-led constraint stifles the natural market supply response.
Traditional energy models incorrectly started with climate supply targets. A more accurate approach models fundamental demand drivers first (population, GDP), revealing a massive, underestimated need for all energy types to meet future growth, challenging supply-centric narratives.
Contrary to the belief that data centers only strain grids, they can lower bills in areas with surplus power. By consuming unused generation capacity, they spread the utility's fixed costs across a larger customer base, preventing existing ratepayers from shouldering the cost of idle assets.
Infrastructure investing, once seen as stable (e.g., toll roads), is now linked to the fast-paced tech sector via AI's needs. This introduces a new risk: rapid technological upgrades can devalue physical assets like cooling systems overnight, creating tech-like volatility.