BLOG — Aug 11, 2025
Navigating the North American Power Market: Insights from Our Recent Webinar
In a rapidly changing energy landscape, understanding the dynamics of the North American power market is crucial for stakeholders across the board. Our recent webinar, titled "North American Power Market Outlook: From Demand Boom to Deployment Bottlenecks," provided in-depth insights into the current state and future projections of the energy sector, driven by expert analyses and robust forecasting tools from S&P Global.
Key Takeaways from the Webinar
1. Significant Energy Demand Growth
The webinar highlighted a remarkable surge in electricity demand, primarily driven by the rise of data centers and electrification trends. Utilities now expect data centers to contribute over 500 terawatt hours (TWh) of new demand by 2030, equivalent to the grid demand in MISO North, and 800 TWh by 2035. This increase is not solely attributed to data centers; reshoring manufacturing and oil and gas electrification are also contributing factors.
Overall, our S&P Global Integrated House View, a forecasting model, projects an increase of 500 TWh, or about 11% higher than previous forecasts, by 2035. Ben Levitt, Director at S&P Global, noted, “This level of on-grid demand may really test the limits on the supply side, especially over the next several years.” Additionally, the historical demand growth trajectory shows that “demand was already on a growth trajectory before the data center narrative entered the discussion”.
2. Supply Chain Challenges
The power generation sector faces significant hurdles in meeting this rising demand. The webinar discussed how the time required to deploy new infrastructure—such as wind and solar—far exceeds the rapid pace of demand growth from data centers. New capacity additions for renewable energy sources are expected to lag behind demand, with the time required to bring new capacity online stretching to 5 to 6 years.
This mismatch could lead to tighter supply-demand balances, necessitating changes in policy or technology to accelerate renewable deployment. The experts highlighted that “the integration of renewable energy faces challenges due to longer development timelines compared to the rapid increase in demand from data centers”.
3. Policy Implications
The Inflation Reduction Act (IRA) and other policy changes introduce uncertainties that could impact future market dynamics. The webinar emphasized the need for stakeholders to stay informed about evolving regulations and their implications on energy investments and market stability. For example, uncertainties surrounding tax credits are actively being debated and could significantly influence future market dynamics and investment decisions.
As noted during the session, “There are considerable uncertainties in power market projections, particularly related to data center demand and supply constraints”. Stakeholders must be prepared to adapt their strategies in response to new regulations, ensuring compliance while also capitalizing on available incentives.
4. Regional Variations
The webinar also addressed the regional disparities in electricity demand growth. Major markets such as PJM, ERCOT, and MISO are seeing concentrated demand increases, driven by factors like electrification and economic growth, which vary significantly across different areas.
For instance, “electricity demand growth varies regionally, with large loads concentrated in major markets such as PJM, ERCOT, MISO, and the Southeast”. The demand growth in PJM and ERCOT is expected to test the limits on supply capacity, as these regions have large loads concentrated in major markets. Understanding these regional dynamics is critical for energy providers looking to optimize their strategies and effectively allocate resources.
5. Capacity Constraints and Market Dynamics
Capacity constraints are emerging as a significant issue, with reserve margins expected to dip below target levels in key markets like PJM and ERCOT. This situation could limit load growth unless substantial changes are made to retirement schedules or load flexibility, highlighting the importance of strategic planning in the face of evolving market conditions.
The webinar underscored that “capacity constraints are emerging as a significant issue, with reserve margins expected to dip below target levels in key markets like PJM and ERCOT”. This emphasizes the need for innovative solutions, such as demand-side management and enhanced grid flexibility, to ensure reliability amid growing demand.
Power Evaluator: S&P Global Integrated House View
Our advanced forecasting tool, the Integrated House View on Power Evaluator, is pivotal in supporting the analysis presented during the webinar. By integrating diverse expert insights and utilizing quantitative models, S&P Global can provide stakeholders with reliable projections and alternative scenarios.
The tool utilizes dynamic modeling techniques to simulate various scenarios, allowing stakeholders to assess potential outcomes based on different assumptions that will influence electricity demand and supply. For instance, it was discussed how the demand growth rate was projected to double from **1% to 2%** per year as new large load expectations emerged, demonstrating the tool's ability to adapt to changing market conditions.
By creating various demand scenarios, we can better navigate uncertainties effectively and strategize accordingly. This adaptability is essential for stakeholders looking to maintain a competitive edge in an increasingly volatile market.
Conclusion: Empower Your Strategic Planning
To stay ahead in the evolving North American power market, understanding these dynamics is essential. Watch the webinar now for a comprehensive analysis of the current challenges and opportunities in the energy sector. Ready to take your strategic planning to the next level?
Book a demo with our team today and discover how Power Evaluator forecasting tools can empower your decision-making, ensuring you are well-equipped to navigate the complexities of the energy landscape.
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