Q1 Reality Check for Capital and Risk Leaders

There was no retreat.
There was recalibration.

Markets did not abandon energy transition exposure. They did not reverse electrification. They did not unwind infrastructure bets.

They narrowed tolerances.

And that distinction matters heading into Q2.

Below is what materially shifted this quarter — and what proved more durable than headlines suggest.

What Changed

Power Demand Moved From Forecast to Constraint

The U.S. Energy Information Administration (EIA) now projects electricity consumption reaching 4,268 billion kWh in 2026 and 4,372 billion kWh in 2027, extending record highs. 

At the regional level, PJM’s 2026 load forecast shows winter peak demand growing 4.0% annually over the next decade, reaching 204,650 MW by 2035/36 — nearly 67,000 MW of incremental load.

Meanwhile, FERC reports more than 10,000 active interconnection requests representing over 2,000 GW of generation and storage capacity awaiting processing.

Demand is accelerating faster than interconnection clearance.

That is not a pricing issue.
That is a sequencing issue.

Capital Is Rewarding Certainty

U.S. energy transition investment reached $378 billion in 2025, up 3.5% year-over-year, while grid investment rose 9.5% to $115 billion.

The composition is the signal.

Capital is flowing toward:

• Transmission and enabling infrastructure
• Contracted revenue models
• Jurisdictions with regulatory clarity

Globally, corporate clean energy PPAs totaled 55.9 GW in 2025, down 10% from the prior year’s record. Yet U.S. corporate PPAs hit a record 29.5 GW.

Investors did not exit the market.
They filtered it.

Data Infrastructure Intensified Load Pressure

Moody’s estimates global data center electricity consumption will reach approximately 600 TWh in 2026, up from about 525 TWh in 2025 — roughly a 14% increase year-over-year.

At the same time, the six largest U.S. hyperscalers are projected to deploy roughly $500 billion in capital expenditures in 2026, rising toward $600 billion in 2027.

When that level of capital compresses into constrained grids, infrastructure timelines tighten automatically.

No policy change required.

Risk Costs Continued Climbing

Aon’s 2026 Property & Casualty Market Outlook reports:

• U.S. general liability rates up 5.6% in Q4 2025
• Aon projected continued single-digit to low double-digit rate firming into Q1 2026, with some casualty lines approaching high single-digit increases.
• Commercial auto liability up 9.2%, with further increases expected

Separately, U.S. commercial reconstruction costs rose 4.4% year-over-year nationally, with several states exceeding 7%.

Insurance markets are not broadly spiking — but they are repricing selectively and directionally upward.

What Didn’t Change

Structural Energy Growth

EIA’s projections confirm that electrification, AI infrastructure, and industrial reshoring continue to push aggregate load upward.

No plateau.
No reversal.

Corporate Decarbonization Direction

The $378 billion deployed in U.S. energy transition investment in 2025 signals continued capital commitment.

The pace may shift.
The direction remains intact.

Disclosure and Underwriting Scrutiny

Even as regulatory debates evolve, lenders and insurers continue integrating:

• Physical climate exposure
• Energy volatility
• Supply chain concentration
• Infrastructure reliability

Transparency expectations did not soften in Q1.

The Executive Implication for Q2

Q1 did not disrupt strategy.

It compressed margin.

• Energy is now a timeline risk.
• Capital is differentiating more aggressively.
• Insurance costs are trending upward.
• Infrastructure readiness is gating expansion.

The companies most exposed in Q2 will not be those pursuing transition.

They will be those assuming 2024 conditions still hold.