Sarah T. Fischell

First power delivered from USA's largest offshore wind farm--2.6 GW off Virginia. That will cut gas. Trump's tariffs and order to stop construction raised costs by $808 million! Federal courts threw out the illegal order, but it caused months of delay. rivieramm.com/news-content-h…

The role of high oil prices and rapidly increasing gas-to-oil production ratios is vastly under-appreciated outside the patch. In the Permian Basin, it’s more of a living nightmare. Two months of negative prices. A new definition of the resource curse. @ColumbiaUEnergy #ONGT

This tweet struck a nerve (and it should) but people are conflating a bunch of things. Let me unpack. Interconnection queues are speculative by nature. Tying into the grid for power has always been a speculative endeavor. Historically only 13-20% of proposed projects actually get built (per LBNL, which tracks ~97% of US generating capacity). Datacenters are downstream of that, and developers have been submitting applications across multiple regions and ISOs to maintain optionality, redundancy, and see who moves fastest. So ~50% being delayed or cancelled has a natural relationship to the speculative nature of project development. It's not all equipment shortages or pricing. That said, the delays and cost inflation are real and they matter. We are still massively building out infrastructure. But 1-2+ year delays and ~2x+ cost increases on key equipment (power transformer unit costs up 77% since 2019 per Wood Mackenzie, distribution transformers up 78-95%) have a meaningful impact on project trajectory. Average time from interconnection request to commercial operation has more than doubled. Around 2 years for projects built in 2008. Over 5 years today. The most important variable right now is time to power. Every MW/GW that isn't stood up is lost revenue for hyperscalers and neoclouds while demand outpaces supply. It's also meaningful because we're still in a race to prove scaling laws hold as cluster sizes grow and models get more sophisticated. Multi-year delays are big complications on both fronts. Transformers were an issue before datacenters showed up. Much of the grid runs on aged equipment at both the transmission and distribution level. The average age of large power transformers in the US is ~40 years. 70% are 25+ years old. 55% of the ~60-80 million distribution transformers in service are older than 33 years (DOE/NREL, 2024). These businesses require skilled labor, high factory utilization to amortize costs, and expansions don't flip on overnight. Equipment doesn't sell at high margin. It's a historically low-margin, capital-intensive industry, so you live and die by cycles. The history is serious difficulties in downturns, which is why many of these businesses are focused on i) selling out capacity and ii) driving price for the first time in a long time. A lot of new capacity is being invested into but it takes years. We exported many of these industries decades ago. China, Korea, Mexico. In 2019, only 18% of large power transformers used domestically were produced here. 82% were imported (DOE/Commerce). Today imports supply an estimated 80% of US power transformer demand (Wood Mackenzie). We have a single domestic producer of grain-oriented electrical steel. This isn't new. We stopped building and supporting domestic efforts long ago. Folks in the last presidential administration wrote reports on transformer supply chain vulnerabilities far before it was sexy to talk about them for data centers (shout out @JigarShahDC). Finally, politics is no joke. I've been banging the drum for 12+ months that local NIMBY-ism was coming for data centers. $18 billion in projects have been blocked and another $46 billion delayed over the past two years (other sources at $100 billion+ delayed figures!). At least 12 states have filed moratorium bills in 2026 alone, with 300+ data center bills filed across 30+ states in just the first six weeks of the legislative cycle. The media cycle on exaggerated power bill inflation and data center water use is convincing many stakeholders that data centers aren't welcome. Bottom line: i) the rate of delays and cancellations is a confluence of many factors and ii) the electrification import problem existed before data centers. Wanted to illuminate both for folks. I'll thread some of my posts over the years on all these fronts.

@GlitchGazer20 @ThomasHochman You will never truly succeed in life unless you trust your prior practice and take the training wheels off. Texas is mogging everyone now in solar + wind + BESS construction. Not because they love it, but because permits are easy and these just print money now.