A demand-driven energy transition
Katie Hall is the CEO and co-chair of Galvanize, a global asset manager investing at the intersection of energy innovation, resilience, and intelligence. This essay is part of the 2026 Global Energy Agenda.
In many markets, clean energy is now the lowest-cost form of new power generation, while demand for electricity is rising in ways few anticipated even a few years ago. By many measures, it is a strong moment for the energy transition. But progress has changed the nature of the challenge.
From where we sit as investors across venture, growth equity, credit, real assets, and public markets, the constraint has shifted from capital to infrastructure, interconnection, and the institutions responsible for building and operating them. Capital is available, but the infrastructure required to deploy it is under strain.
In the United States alone, more than a terawatt of generation capacity, much of it renewable, is waiting in interconnection queues. At the same time, the entities responsible for building and operating critical infrastructure are being asked to expand far beyond their historical pace.
Three reinforcing dynamics are driving this shift: accelerating demand, changing buyer behavior, and a reordering of where value accrues across the energy value chain.
First, demand is rising faster than the system was built to accommodate. After decades of relative stability, electricity demand is increasing. The expansion of data centers and artificial intelligence—alongside the electrification of transport, buildings, and industry—is driving a step change in load growth.
Artificial intelligence is accelerating this shift but did not create it. The broader electrification of the economy was already under way, from vehicles to industrial automation to modern defense systems. What’s different is that the pace has changed. Timelines that once unfolded over decades are now being compressed into investment cycles measured in years.
As a result, power demand is becoming less predictable—more volatile, more concentrated, and more difficult to plan for—placing stress on systems designed for steady, linear expansion. Access to large volumes of dependable electricity is emerging as a prerequisite for economic expansion.
Second, buyer behavior is changing in response. The first wave of the energy transition was driven largely by climate ambition—corporate commitments, policy targets, and the search for lower-carbon alternatives. That work mattered because it built the foundation of today’s energy system.
But the underlying driver has changed, and we see it directly in conversations with corporate leaders. Companies are increasingly investing in energy efficiency and clean power to reduce operating costs, secure supply, and improve competitiveness. From airlines modernizing fleets to cut fuel costs, to shipping companies lowering operating expenses through more efficient vessels, to retailers investing in self-generation for price stability and resilience, the logic is shifting from aspiration to economics.
We are seeing the same dynamic play out in real assets, where tenants are placing increasing value on access to reliable, cost-predictable power, shaping where they locate, how they lease, and what they are willing to pay for. Energy is becoming a core driver of occupancy and asset value.
This same shift is reshaping how energy is procured. Renewables are now a means of securing the power required to operate and grow. When access to power becomes business critical, buyers move faster, adopt new contracting and deployment models, and place greater value on certainty of supply. Power procurement is shifting from finding the lowest-cost electricity to securing reliable access first and then managing cost within those constraints.
In practical terms, we see this leading to longer-term agreements, more flexible deal structures, and a greater willingness to engage with solutions that would have been considered too early or too expensive in a lower-demand environment, creating new pathways for capital deployment. In effect, large energy buyers are beginning to act more like infrastructure investors—locking in supply, shaping project development, and, in some cases, directly underwriting new capacity.
Taken together, these dynamics are redirecting capital away from standalone generation and toward the infrastructure required to connect, move, and deliver power to where it’s needed.
This is driven by the fact that, for the first time in decades, electricity has become a scarce and strategic asset. As that happens, the value of power rises in both price and access. When power becomes scarce, value migrates from standalone generation toward the systems that enable delivery, like interconnection, flexibility, and proximity to demand.
We are already seeing this play out across the system. A much-needed nuclear renaissance, while increasingly likely, will depend on whether utilities and governments can modernize how large-scale infrastructure is financed and delivered. At the same time, geothermal is advancing faster than many policymakers and grid planners have fully incorporated into their outlooks.
This trend extends beyond generation. Utility-scale renewables remain essential, but the most critical opportunities increasingly sit in the infrastructure around generation: storage, distributed energy, grid-enhancing technologies, flexible load, advanced procurement models, and software that can manage growing complexity.
While demand growth is widening the aperture of viable solutions, it is also exposing trade-offs. Wind and solar are fast to deploy and cost competitive, but on their own, they do not fully meet the needs of an electrified economy. Storage can help, but the scale required for continuous coverage can be costly. Transmission would unlock enormous value but remains slow to build in many markets. As a result, capital is moving toward solutions that can operate within these constraints: assets that can be deployed quickly, located closer to demand, and integrated flexibly into existing systems.
The transition will continue to unfold unevenly. In some markets, rising demand is leading to delays rather than acceleration. Projects are stalled by lack of grid access, customers are forced into suboptimal solutions, and there is a widening disparity in who can secure power and who cannot. The result is a widening gap between regions that can secure reliable power and those that face growing constraints.
In summary, the opportunity in this next phase of the transition lies in building the capabilities required for an electrified economy: generation, flexibility, reliability, intelligence, and speed. It requires identifying where demand is most acute, where infrastructure is most constrained, and where new solutions can unlock both decarbonization and growth.
It follows that the next phase of capital deployment should back the companies and assets that can meet rapidly growing demand for power while making the system cleaner, more resilient, and more productive.
The era of climate ambition built the foundation, but the era of demand will determine what scales.
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Image: Vehicles move along the assembly line as Honda announces plans to build electric vehicles and their parts in Ontario with financial support from the Canadian and provincial governments, at their automotive assembly plant in Alliston, Ontario, Canada, April 25, 2024. REUTERS/Carlos Osorio