Latest news with #electricitydemand
Reuters
2 days ago
- Business
- Reuters
Biggest US power grid auction prices rise by 22% to new heights
July 22 (Reuters) - Prices out of the biggest U.S. power auction, held by grid operator PJM Interconnection, cleared at $329.17 a megawatt-day, roughly 22% higher than last year's record-high levels as electricity demand continues to outstrip supply, according to results released by the organization on Tuesday. A recent surge in U.S. power consumption driven by Big Tech's data center demand has butted up against roughly a decade of shrinking power supplies in PJM, North America's largest power grid operator, leading to a supply shortfall that has driven up prices in the capacity auction. PJM's capacity auction determines what power plant owners in the grid network, which covers one in five Americans, will be paid to guarantee that they pump out electricity during times of extreme demand to help avoid blackouts. Shares of major power-producing companies that receive capacity payments rose on the auction results. Talen Energy shares were up over 9%, Constellation Energy shares rose over 5%, and NRG Energy (NRG.N), opens new tab climbed over 6% in trading after the bell. The payments are a sign of the energy supply and demand balance in PJM, with higher prices typically acting as an incentive for developers to build more power plants. PJM's territory covers 13 states and the District of Columbia, as well as the biggest concentration of data centers in the world, including Virginia's "Data Center Alley." The latest auction, which covers the year beginning next summer, is showing signs of a continued supply crunch. PJM attracted 2,669 megawatts of additional power supplies, which will be added through upgrading existing power plants and adding new ones, marking the first time in the last four auctions that new generation was added. The additions, however, represent only about half the amount of new power demand PJM expects to see over the period the auction covers. While prices overall increased from last year, two zones within PJM - covered by Baltimore Gas and Electric Company and Dominion Energy (D.N), opens new tab - saw price decreases. "Rapid electricity demand growth continues to outpace the rate of new generation," Evercore ISI analyst Nicholas Amicucci said in a note of the higher prices. Year-ago auction prices shot up by more than 800%, rising to $269.92 per megawatt-day from the previous year as data center demand crept up. Prices from that auction began to take effect last month, while the most recent results will impact bills beginning next summer. Those high payment prices, which are ultimately paid for by the public, drew a backlash from state consumer advocates, politicians and environmental groups, leading to several changes at PJM. PJM says it expects power bills for homes and businesses will rise only 1.5% to 5% year-over-year as a result of the latest auction results. Prices in BGE and Dominion may decline, it said. The types of power-generating capacity cleared through the auction included 45% natural gas, 21% nuclear, 22% coal, 4% hydro, 3% wind and 1% solar. Environmental groups, which successfully sued over the last PJM capacity results, said PJM has failed to quickly connect new carbon-free renewable power like wind and solar. 'PJM has failed our communities through its refusal to adopt substantive reforms, completely at odds with its mission of providing reliable energy at the lowest cost to its customers,' said Jessi Eidbo, Sierra Club senior adviser. PJM said it has approved the connection of 46,000 MW of power plants, many of them solar, but those projects have not yet been built for reasons outside the grid operator's control.
ABC News
13-07-2025
- Business
- ABC News
As Trump turns his back on renewables, China is building the future
A few days after Donald Trump signed the One Big Beautiful Bill that ended most subsidies for renewable energy, among many other things, the leading artificial intelligence (AI) company, Nvidia Corporation, became the first to pass $US4 trillion ($6.08 trillion) in value. And a few days after that, on Thursday, Bitcoin hit a new record high above $US117,000. The data centres that operate both AI and cryptocurrency are already massively increasing electricity demand and investors are obviously expecting them to keep doing so — exponentially. Meanwhile, the BRICS summit in Brazil last week — it stands for Brazil, Russia, India, China, South Africa — went in the opposite direction to the United States on climate change, committing to "intensify global efforts to contain global warming". Chinese President Xi Jinping didn't make it to Brazil, but he chaired a meeting of China's Central Commission for Financial and Economic Affairs which issued a directive to crack down on overcapacity and "disorderly competition" in solar power. Let's join the dots: America is pivoting back to fossil fuels and pulling out of renewable energy while the rest of the world continues to do the opposite, China is grappling with too much renewable energy while investors are bidding expectations to record highs for the new industries whose data centres are eating the world's electricity. In his Independence Day address after signing the One Big Beautiful Bill, Trump said: "I noticed something — with all the windmills that China sends us, where we waste our money because it's the most expensive energy, you know they make about 95 per cent of them, the wind turbines, I have never seen a wind farm in China! Why is that?" That is a long way from being true: China is bristling with wind farms, and solar farms. Mistake number two for Trump is the cost: wind and solar are now the cheapest form of energy in China, as well as in most other places, and onshore wind is by far the cheapest, less than half the cost of coal. China's long-term strategy of dominating the manufacture of renewable energy and electric vehicles, as well as critical minerals, especially the rare earths needed in modern technology, is now paying off, big time. Meanwhile, in the US, Trump announced a 50 per cent tariff on imports of copper, which is one of the minerals needed for AI and renewable energy. This will make it virtually impossible for manufacturers in the US to compete with China in high-tech manufacturing. That was on top of letters Trump sent to dozens of national leaders last week telling them what the tariff is going to be on their exports to America. Why would America embark on such a series of colossal, and obvious, acts of self-harm? The rejection of renewable energy and turning back to coal is pure ideology, a macho rejection of environmentalism and wokeism. As Paul Krugman wrote the other day: "Real men burn stuff and don't worry if the process is dirty." In his Independence Day speech, Trump declared: "Coal is back. You can't use the word 'coal' unless you precede it by saying 'clean beautiful coal.'" China is also building coal-fired power stations, but only because it has to; the idea of saying "coal is back" and calling it clean and beautiful at the same time as more than one hundred people were dying in a Texas flood is insane. As for the tariffs, the world's economists and trade policy experts are mystified by America's trade wars, but I don't think that's what they are: tariffs are taxes that Trump can say are paid by foreign countries rather than by Americans. The letters he sent last week all said: "We will charge (insert country) a Tariff of only (insert number) on any and all … products sent into the United States." That's what he always says when he's talking about the tariffs — that he is "charging" that country, as if it's a kind of fee paid to the US government for the right to sell stuff to Americans, and that the US Treasury is making tons of money from them. It is, but not from the other countries. He knows, of course, as does everyone else, that tariffs are a sales tax paid by the American buyers of the imported products or absorbed into the margins of the local companies importing them if they can't pass it on for some reason. The US government is "charging" the Americans who buy Brazilian products a 50 per cent tax on what they buy, not Brazil, and will be putting a 50 per cent tax on copper, as well as taxes of at least 10 per cent on every import coming into the US. It is a GST of at least 20 per cent on the $US4.1 trillion of goods imported into the US — 14 per cent of total goods sold. Before the tariffs are fully in place, the US government is already making about $US30 billion in extra revenue and will theoretically increase to about $US500 billion. Except that Trump keeps saying that American citizens aren't paying it — someone else is. It is breathtaking, brilliant, political mendacity; the media, economists and his political opponents are getting tired of pointing it out, and he just keeps saying it, proving Joseph Goebbels's dictum that if you repeat a lie often enough it becomes true. The result of all this is that China — a ruthless autocracy — appears destined to take global leadership from the US, in trade, the means of producing energy and, possibly, in "soft power", or moral leadership, as the US withdraws from foreign aid and multilateralism. The US dollar seems entrenched as the world's reserve currency and the basis of most finance and trade, but even that can't be taken for granted. It won't be replaced by Bitcoin, but a combination of the Euro and Chinese yuan is likely to eat into its market share. But Bitcoin and the other cryptocurrencies are not going away, and the data centre capacity they require will continue to add to the ballooning demand for computing power and electricity from AI. And while the leader in AI chip design, and now the world's most valuable company — Nvidia — is American, its chips are made in Taiwan, just as Apple's iPhones are made in China. The American technology companies like Nvidia, Microsoft, Meta, Apple and Amazon still reign supreme over the internet and AI era, but China is closing on them fast. China is already in the process of obliterating the American and European car industries with solid, well-designed, cheaper vehicles and will almost certainly do the same with all other high-tech products, including robots. So, it's entirely appropriate that Anthony Albanese is meeting Xi again before he meets Trump for the first time. Xi is more important than Trump now. Alan Kohler is finance presenter and columnist on ABC News and he also writes for Intelligent Investor.
Forbes
10-07-2025
- Business
- Forbes
Oklo Stock: Big Promise, Bigger Risk?
CANADA - 2025/05/13: In this photo illustration, the Oklo logo is seen displayed on a smartphone ... More screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images) Oklo stock (NYSE:OKLO), the nuclear energy startup supported by OpenAI's Sam Altman, has performed remarkably well, rising over 140% year-to-date in 2025. There is ample justification for the enthusiasm. Oklo is constructing compact, fast-spectrum microreactors that strive to provide clean, safe, and cost-effective electricity, which could be advantageous as electricity demand escalates and worries about climate change and global warming grow. Nonetheless, the company remains pre-revenue, with its first commercial reactors anticipated to come online in 2028 or 2029. Currently priced at around $54 per share and possessing a market cap close to $8 billion, Oklo stock is not only highly valued but also somewhat speculative. So what exactly does Oklo do and how does the risk-to-reward ratio appear for the stock? Why Nuclear Looks Attractive The demand for electricity is projected to surge significantly in the upcoming years, and nuclear energy presents a compelling solution. In contrast to intermittent renewable sources like wind and solar power, nuclear provides clean, stable, round-the-clock electricity. The technology sector is quickly expanding data centers to meet the energy-intensive requirements of generative artificial intelligence, while President Trump's extensive domestic manufacturing initiative and a wider movement toward electrification continue to elevate power requirements. Concurrently, environmental threats are increasing, with global warming necessitating cleaner energy sources. Oklo's Promising Tech Oklo is developing compact, fast-spectrum microreactors intended to deliver clean, safe, and cost-effective energy. The company's Aurora line of reactors targets power capacities ranging from 15 to over 100 megawatts. This marks a significant shift from traditional nuclear power plants in the U.S., which average around 1,000 megawatts. This results in a smaller and far more adaptable footprint. The reactors utilize fast neutrons along with liquid-metal cooling, avoiding the complexities associated with high-pressure systems, while enhancing fuel efficiency and safety. One of Oklo's hallmark innovations is the employment of recycled nuclear waste as fuel, turning a long-standing issue into a valuable clean energy asset. With running times of 10 years and no requirement for on-site fuel handling, these microreactors are well-suited for remote and high-demand applications such as AI data centers, industrial facilities, and military installations. The company plans to sell electricity rather than power plants, directly to customers under long-term contracts, which should ensure consistent revenue and profits. Regulatory Tailwinds The U.S. regulatory landscape seems to be shifting positively for advanced nuclear projects. Recent executive orders from President Trump aim for an increase in nuclear capacity from 100 GW to 400 GW by 2050. Importantly, the Nuclear Regulatory Commission is streamlining its processes, implementing new regulations that require reactor licensing decisions within 18 months. These changes are designed to expedite the deployment of advanced technologies like those developed by Oklo. Additionally, the U.S. Department of Defense is becoming an important customer for Oklo, collaborating with the company to supply its reactor technology to power the Eielson Air Force Base in Alaska. Risks Nonetheless, with no significant revenues anticipated until at least 2028, Oklo will be consuming substantial cash to support its R&D, licensing, and operational build-out in the coming years. As of the end of Q1 2025, the company held approximately $260 million in cash and marketable securities, while it projects an annual cash burn of $65 to $80 million for the current fiscal year. At that burn rate, Oklo has about 3 to 4 years of funding runway, provided that its costs do not increase. This suggests a possibility that equity dilution or additional debt may be required in the future. Even if Oklo successfully navigates regulatory challenges, scaling production and commercial deployment will be a substantial hurdle. Many prominent energy and hardware startups have faltered at this critical juncture, struggling to transition from promising prototypes to reliable performance in real-world settings at scale. Uncomfortable with the inherent risks of OKLO stock? You might consider the Trefis Reinforced Value (RV) Portfolio, which has surpassed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) resulting in strong returns for investors. What accounts for this? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks provides a responsive approach to maximizing favorable market conditions while reducing losses during market downturns, as detailed in RV Portfolio performance metrics.
Globe and Mail
09-07-2025
- Business
- Globe and Mail
Can VST Gain From Surging Electricity Demand in Its Service Areas?
Vistra Corp. VST is poised to capitalize on rising electricity demand across its core service areas. This demand growth is fueled by the electrification of the oil and gas industry, especially in the Permian Basin, new LNG infrastructure, large-scale AI-powered data centers and the ongoing reshoring of industrial operations in the United States. The accelerating shift toward clean energy is a significant tailwind for Vistra's dispatchable generation capabilities, its expansive retail footprint and ability to support grid reliability. Since 2018, Vistra has added 7,922 megawatts (MW) of zero-carbon generation, with additional clean energy projects currently in development to meet growing demand. As a vertically integrated power company, Vistra can capture value across both wholesale and retail markets. Its robust operations, consistent retail performance and stable earnings across economic cycles reflect the strength of this integrated model. Currently, Vistra serves nearly 5 million residential, commercial and industrial customers and operates approximately 41,000 MW of generation capacity across natural gas, coal, nuclear, solar and battery storage. VST's diversified and flexible asset portfolio enhances its resilience in the face of evolving regulatory and environmental requirements. The regulatory extension of the Perry Nuclear Power Plant's life to 2046, along with solid liquidity and rising output, reinforces Vistra's ability to thrive amid grid transformation and expanding regional electricity demand. How Utilities are Gaining From Surging Demand Utilities are benefiting from soaring electricity demand driven by data center expansion and Permian Basin electrification. These trends are boosting load growth, enabling utilities to invest in grid infrastructure, expand generation capacity and secure long-term revenues through industrial and high-load customers. American Electric Power AEP and CenterPoint Energy CNP are well-positioned to benefit from data center growth and Permian Basin electrification. AEP is expanding transmission infrastructure to support rising industrial and data center loads, while CenterPoint is enhancing grid capacity in West Texas to meet the increasing power needs of oil and gas operations, driving long-term revenues and system modernization. VST's Sales Estimates Move Up The Zacks Consensus Estimate for Vistra's 2025 and 2026 sales indicates year-over-year increases of 28.91% and 4.53%, respectively. VST Stock's ROE is Higher Than Its Industry VST's trailing 12-month return on equity ('ROE') is 87.33%, way ahead of its industry average of 10.41%. ROE, a profitability measure, reflects how effectively a company is utilizing its shareholders' funds in operations to generate income. VST's Price Performance Shares of Vistra have surged 80.5% in the past three months compared with the Zacks Utility- Electric Power industry's growth of 1.6%. Price Performance (3 Months) VST's Zacks Rank Vistra currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CenterPoint Energy, Inc. (CNP): Free Stock Analysis Report Vistra Corp. (VST): Free Stock Analysis Report
Yahoo
08-07-2025
- Business
- Yahoo
10 Under-the-Radar Utility Stocks with Incredible Growth Potential
Utility stocks have not, historically, been known as growth investments. Demand for electricity is set to see a step change. Utilities are suddenly offering more growth potential, even though investors still see them as boring dividend stocks. 10 stocks we like better than NextEra Energy › Utility stocks were once called "widows and orphans" stocks because they were considered so safe and boring. That image isn't far from the view today, noting that utilities are generally looked at as reliable dividend stocks. But things could be about to change thanks to a step change in demand for electricity. Here are 10 utility stocks that present under-the-radar opportunities thanks to the growth the utility sector is about to see. Before getting into the list of 10 utilities that you might want to look at today, it is important to understand the key underlying trends in the sector. Between 2000 and 2020 electricity demand grew 9%. Not 9% a year, just 9% over the entire 20-year period. Over the next 20 years, however, electricity demand is expected to grow by 55%. Compared to 9%, 55% is practically explosive growth. The demand surge will flow from artificial intelligence (AI) and data centers, which are projected to see a 300% demand increase over just the next decade. And electric vehicles, which are projected to see an increase in electricity demand of 9,000% between now and 2050. All in, electricity is projected to grow from 21% of final energy demand to 32% by the middle of the century. This should drive growth for utilities across the country, and for some companies that produce electricity but that aren't actually utilities. Here are 10 companies to start you off if you want to take advantage of the long-term growth potential on offer from the utility sector. OK, Vanguard Utilities Index Fund ETF (NYSEMKT: VPU) isn't a company at all, it's an exchange traded fund. However, if you aren't inclined to try to pick stocks, it gets you exposure to the utility sector quickly, easily, and in a diversified manner. Since the entire utility sector should benefit from the demand trends, Vanguard Utilities Index Fund ETF is a good punt option. The yield is currently around 2.8%. NextEra Energy (NYSE: NEE) owns the largest utility in the state of Florida and has increased its dividend at a rapid 10% annualized clip over the past decade. That's largely driven by the fact that NextEra Energy also owns a business that operates solar and wind power assets, which are not regulated. This provides investors with a solid foundation and a growth platform all in one investment. The yield is currently around 3.2%. The Southern Company (NYSE: SO) is one of the largest utilities in the United States with a focus on the Southeast. The big story here is the recent start up of two nuclear reactors, which will provide the utility with reliable clean energy to sell for decades to come. The construction of those power plants was over budget and delayed. But now that they are up and running Southern Company's outlook is far less cloudy and it is positioned to supply power without the negative of producing greenhouse gases. The yield is 3.2%. Duke Energy (NYSE: DUK) has recently slimmed its business down, selling off non-regulated assets. The goal was to focus on the far more reliable demand that comes from regulated utility customer bases. This demand is set to see increased growth thanks to things like AI, data centers, and EVs. The big benefit for investors is that the ups and downs of Wall Street aren't really a factor for Duke Energy's plans once regulators approve its capital spending and rates. The dividend yield is around 3.5%. Dominion Energy (NYSE: D) is a bit tougher to love than the utilities noted above. That's because, like Duke, it has been trimming its business, which is now largely focused on regulated electric assets. But along the way there was a dividend cut and right now the dividend is stuck in neutral until Dominion's balance sheet is in better shape. But the dividend yield is a lofty 4.7% and the company operates in one of the most important data center markets in the world. It's worth a look for more aggressive investors. Shifting to the opposite extreme, Black Hills Corporation (NYSE: BKH) has increased its dividend annually for more than five decades. That makes it one of the few utilities to have achieved Dividend King status. Add in a yield of 4.8% and income seekers will probably find it very attractive. Notably the utility's customer base is growing at nearly twice the rate of the broader U.S. population. Constellation Energy (NASDAQ: CEG) isn't a regulated utility, instead selling power "competitively." The big story here, however, is that the company operates the largest nuclear power fleet in the United States. There's more downside risk here, since customers can cancel their contracts (which they can't really do within a regulated supplier relationship), but there's more upside, too, since increasing demand could lead to increasing power prices. Include the big position in nuclear power, which is likely to help sate the huge demand from AI, and it looks like Constellation could be a growth story poised to take off. It has a tiny yield of 0.5%, however, so income investors probably won't be interested. Speaking of non-utilities, Brookfield Renewable (NYSE: BEP)(NYSE: BEPC) is another clean energy investment to consider. This is basically a one-stop shop for investors, given that its portfolio spans across hydroelectric, solar, wind, battery storage, and nuclear. And it owns assets the world over, so the opportunity for growth goes well beyond just the U.S. market. The company recently signed a decade-long deal to provide Microsoft with clean power for data centers. The one wrinkle here is that there are two different ways to buy Brookfield Renewable, with the partnership class offering a 5.8% distribution yield and the corporate class offering a 4.5% dividend yield. The two classes represent the same entity, the difference in yield is driven by higher demand for the corporate class of shares. This is an attractive investment, but it's a bit complex. Portland General Electric (NYSE: POR) is a mix of opportunity and risk. On the risk front, it operates on the West Coast, where wildfires have been an ongoing concern. That said, on the positive side, its service area includes a key landing for international subsea communications cables. That puts Portland General Electric in a prime location for data centers and technology companies, noting that its service area includes the so-called "silicon forest" region. If you can handle the wildfire risk, the stock has a 5.1% dividend yield. Last up on the list is Eversource Energy (NYSE: ES), which operates regulated utility assets in the Northeast. What's interesting here is that the company doesn't own power generation assets, it only distributes power on a local and interstate level. It passes the cost of power directly on to the customer, with its earnings largely derived from fees for the use of its transmission assets. Regulatory rate increases and new customer growth are the key stories here, with exposure to water and natural gas helping to provide a diversified business foundation. The dividend yield is roughly 4.7% today. What's exciting about the trends driving demand for electricity is that they aren't going to play out in a year or two. They are expected to last decades, providing an opportunity for buy and hold investors to build material long-term wealth as the demand growth story plays out. The above 10 investments are a diversified collection of stocks (and one ETF) that you might want to look into now as the demand growth trends are just starting to pick up their pace. Before you buy stock in NextEra Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and NextEra Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $976,677!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Reuben Gregg Brewer has positions in Black Hills, Brookfield Renewable Partners, Dominion Energy, and Southern Company. The Motley Fool has positions in and recommends Constellation Energy, Microsoft, and NextEra Energy. The Motley Fool recommends Brookfield Renewable, Brookfield Renewable Partners, Dominion Energy, and Duke Energy and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. 10 Under-the-Radar Utility Stocks with Incredible Growth Potential was originally published by The Motley Fool
