For most of my career, electricity prices have been dull. For more than a decade, US inflation was very low, and so too was electricity price inflation, regardless of the use class. Homeowners, small-and-medium businesses, and even major heavy industrial consumers could expect price increases in a tight band centered on zero. While the market was not immune from price action, it was not the kind of trend that required customers to take their own action in response.
US electricity demand is growing at a rate not seen in three decades. You know this, of course, if you read this blog, but you also know it from any given week of coverage of the US energy sector. News flow has conditioned us to expect that much of this demand is coming from data centers, which are certainly a highly concentrated, highly visible manifestation of electricity consumption in many state power markets.
Years ago as a young-ish analyst I learned an important thing about building meaningful information products: they require both a supply push and a demand pull in order to really work. If there is supply and no demand, no one will buy; if there is demand and no supply, there is nothing to sell.
Halcyon programming note: we are all in movement this week as we prepare to gather the entire team in San Francisco next week. While we’re thrilled to get our team together, we will be taking a break from our normally scheduled content, so see below for three announcements from us to hold you over!
I had the fortune (neither good nor bad) of being an energy analyst in 2008 as Lehman Brothers collapsed, in part triggering a global financial crisis. I was also an energy analyst, again, when a pandemic caused the mechanics and circulatory system of much of the global economy to seize up in 2020.
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