The energy landscape continues to shift as grid reliability challenges intensify, regulatory battles heat up, and emerging technologies promise to reshape electricity markets. Today’s GridBrief covers the growing demand for permitting reform, the transformer supply bottleneck threatening grid stability, and the latest push for nuclear power as a viable solution. Plus, we’ve got strategic bets worth making—and those you should avoid.

US Governors Demand Permitting Reform

The National Governors Association (NGA) is urging Congress to pass permitting reform legislation to accelerate infrastructure development and ensure energy resilience. Co-chaired by Oklahoma Gov. Kevin Stitt and Pennsylvania Gov. Josh Shapiro, the NGA’s new working group will focus on modernizing the National Environmental Policy Act, streamlining judicial reviews, and easing transmission siting regulations.

With bipartisan support, the NGA is pressing for reform to speed up the expansion of power plants, transmission lines, and gas pipelines. U.S. governors argue that current permitting delays threaten grid reliability as demand surges, driven by data centers, AI, and electric vehicles. Department of Interior Secretary Doug Burgum warns that the U.S. faces an energy “catastrophe” if it doesn’t rapidly expand baseload power sources.

While there’s rare political alignment on the need for reform, passing meaningful legislation remains a challenge. Previous efforts have stalled in Congress, and opposition from environmental advocacy groups could further complicate negotiations. However, the growing urgency to address capacity shortfalls might finally push permitting reform across the finish line.

Transformer Shortage Threatens Grid Stability

A crippling transformer shortage is jeopardizing the stability of the U.S. power grid, as surging demand, aging infrastructure, and extreme weather events strain an already fragile supply chain. Industry experts warn that the wait time for new transformers has skyrocketed from a few weeks to up to three years, with no relief in sight.

The National Renewable Energy Laboratory (NREL) forecasts a 16% increase in electricity demand by 2030, driven by the rapid growth of AI data centers, electric vehicles, and electrified heating systems. However, the U.S. lacks the transformer manufacturing capacity to support this surge. More than half of residential transformers are over 40 years old, nearing the end of their life cycle.

Despite a $1.5 billion investment in new transformer production capacity by manufacturers like Hitachi Energy, industry analysts predict shortages will persist for at least another decade. To mitigate the crisis, policymakers are considering standardizing transformer designs, creating a virtual reserve of manufacturing capacity, and extending the federal 45X tax credit for domestic production.

With grid reliability on the line, the industry is calling for urgent policy interventions to prevent widespread blackouts and power disruptions.

Atlantic Council Report Pushes for Nuclear Renaissance

The Atlantic Council’s latest report argues that nuclear power is crucial for achieving net-zero carbon emissions and ensuring grid reliability. It emphasizes the need for a streamlined regulatory process to accelerate the deployment of Small Modular Reactors (SMRs) and Advanced Nuclear Reactors.

The report highlights the importance of public-private partnerships to finance nuclear projects and reduce costs through advanced manufacturing techniques. It also calls for extending federal tax credits and expanding research and development funding to maintain U.S. leadership in nuclear technology.

While nuclear power is gaining traction as a reliable, low-carbon energy source, challenges remain. High upfront costs, regulatory hurdles, and public opposition continue to hinder progress. The Atlantic Council’s report underscores the need for comprehensive policy reforms to overcome these barriers and secure nuclear energy’s role in the clean energy transition.

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Conversation Starters

• NucNet - Nuclear Companies Sign Manifesto As Momentum Grows for Spain to Reconsider Nuclear Phaseout
  Amid growing energy security concerns, 32 companies in Spain’s nuclear industry are pushing for lifetime extensions of existing reactors, challenging the planned phaseout by 2035.
  

• Texas Tribune - Companies are Coming to Texas to Develop a New Generation of Nuclear Reactors
  Texas is emerging as a hub for advanced nuclear energy, with multiple startups investing in Small Modular Reactors to power industrial operations and data centers.
  

• National Law Review - Powering the Digital Future: Navigating the Nuclear Option for Data Centers
  As AI and data centers demand more power, nuclear energy is being explored as a reliable, low-carbon option, but regulatory complexities could slow adoption.

Good Bet, Bad Bet

Good Bet: ChargePoint (CHPT)
The EV charging network sector is struggling with low utilization rates and high operating costs. ChargePoint faces headwinds as demand remains inconsistent and federal subsidies for charging infrastructure are stalled. Shorting CHPT could be profitable as the market corrects its overly optimistic growth expectations.

Bad Bet: Carbon Capture Vessels
Several startups are touting ocean-based carbon capture vessels as a climate solution, but the technology is speculative and faces regulatory challenges. Investors should be cautious—scalable deployment is years away, and the economic viability remains uncertain.

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