As the world rapidly advances into an era of unprecedented technological demand, the US power grid stands at the center of a transformative megatrend. According to Jim Puplava, founder and president of Financial Sense Wealth Management, five converging forces are driving an extraordinary surge in electricity demand, creating what he calls “the next big thing” for forward-looking investors. These forces—artificial intelligence (AI), cloud computing, electric vehicles (EVs), reshoring of manufacturing, and the energy transition—are reshaping the nation’s energy landscape and pushing the boundaries of its electrical infrastructure.In a recent conversation on the Financial Sense Newshour, Puplava laid out a compelling vision of how these trends are accelerating, the challenges they pose, and the investment opportunities they present. His insights, backed by years of research and analysis, underscore the monumental shifts underway and the urgent need to modernize and expand the US power grid in very specific ways.Podcast audio: The Next Big Thing: More Power!
The Five Forces Driving an Energy Revolution
Puplava identifies five key forces that are collectively placing massive new demands on the U.S. electrical grid:1. Artificial Intelligence (AI)AI is rapidly transforming industries, but it comes with a steep energy cost. Data centers, which power AI and the cloud-based economy, require immense amounts of electricity. Puplava cites AI and technology expert Mark Mills, Executive Director of the National Center for Energy Analytics, who states that AI-driven applications are spurring demand for data centers that consume “50 to 100 times more power than a skyscraper” (see America’s Power Surge: Mark Mills on AI, Data Centers, and Natural Gas for related interview). As AI adoption grows, the energy requirements for training and running AI models will continue to rise at a rapid pace.2. Cloud ComputingThe cloud, another cornerstone of the digital economy, has become integral to modern business operations. As Puplava explained, the rise of cloud computing over the past decade has driven a resurgence in electricity demand, which had stagnated for years. These data centers, the backbone of the cloud, are energy behemoths that require reliable and scalable power solutions to support the growing digital infrastructure.3. Electric Vehicles (EVs)The transition to EVs represents a significant shift in transportation, but it also introduces new challenges for the power grid. While Puplava believes EVs will play a more prominent role in the 2030s, the groundwork for charging infrastructure is being laid today. “Just as the entire country is populated with gas stations,” he explained, “we’re going to have to populate the entire country with EV charging stations.” However, EV adoption in colder regions may face hurdles due to reduced battery efficiency in extreme weather conditions.4. Reshoring of ManufacturingThe return of manufacturing to the US—a trend accelerated by global supply chain disruptions and government incentives—is driving electricity demand to new heights. Puplava highlighted the construction of over 900 factories across the country, including massive semiconductor plants in Arizona, such as Taiwan Semiconductor’s new facility, Intel’s expansion, and Apple’s projects. These factories require vast amounts of reliable energy, further straining the grid.5. The Energy TransitionThe increasing use of renewable energy sources adds further complexity and strain to the power grid. Intermittent energy sources like wind and solar cannot provide the consistent, high-capacity power needed for industrial applications and data centers. Puplava emphasized that the inclusion of renewables must be balanced with investments in reliable base-load power sources, such as natural gas and nuclear energy.
A Surge in Electricity Demand
The combined impact of these five forces is driving electricity demand to levels not seen in decades. According to Puplava, electricity growth, which had stagnated in the early 2000s, is now accelerating. “Since 2020, forecasted electricity demand has grown from 2.8% to 8.2% over a five-year period,” he explained. Forecasts suggest an additional 16% growth by 2029, with demand growth rising from 23 gigawatts to 128 by 2029 (source).To put this into perspective, one nuclear power plant typically produces about one gigawatt of electricity. Meeting the projected demand would require the equivalent of building dozens of new nuclear plants—or their energy-generation equivalent—within the next decade.
Regional Hotspots of Growth
Puplava outlined the regions where energy demand is expected to grow most significantly (source):
Puplava emphasized that the availability of reliable power is a critical factor for these regions. For example, Virginia, a hub for internet traffic, will require significant investments in grid infrastructure to support its growing data center industry.
The Role of Natural Gas and Modular Nuclear Power
Given the soaring demand, how will the US power grid keep up? In alignment with Mark Mills, Puplava believes that natural gas will play a pivotal role in the near term, while modular nuclear reactors represent a promising long-term solution.Natural Gas: The Transition FuelNatural gas is currently the most scalable and readily available energy source to meet immediate demand. Puplava cited a recent example where Elon Musk built a data center powered by 100,000 Nvidia chips and supported it with two natural gas plants in just three months. “This is the transition fuel,” he said, emphasizing its ability to provide reliable base-load power quickly.Modular Nuclear Reactors: The FutureWhile nuclear power offers a long-term solution, regulatory and bureaucratic hurdles have hindered its growth in the US. Modular nuclear reactors, which can be manufactured and deployed more quickly than traditional plants, represent a potential game-changer. However, Puplava estimated that it will take at least five years to begin large-scale deployment.Globally, countries like China and India are leading the charge in nuclear energy, with dozens of plants under construction. In contrast, the US has seen its nuclear fleet decline from 112 plants to 93, with only one new plant under construction. “We’ve lost our global leadership in nuclear power,” Puplava lamented, pointing to China’s ability to build a new plant in three to five years, compared to 10 to 15 years in the US.
Investment Opportunities in the Energy Megatrend
For investors, the transformation of the US power grid presents potential investment opportunities. Puplava highlighted several key areas that his investment team is actively analyzing or has exposure to:
Investments in natural gas production and infrastructure are poised to benefit from the immediate need for scalable energy solutions. Puplava expects natural gas exports to increase as regulatory barriers are eased, further boosting demand.
Utilities serving regions with significant data center and manufacturing activity—such as Texas, Virginia, and the Midwest—are likely to see strong growth. Puplava noted that utilities in these areas could experience growth rates comparable to industrial companies.
Companies involved in building and modernizing the grid, including transmission lines and substations, will play a critical role in meeting rising electricity demand.
While still in its early stages, modular nuclear power offers a long-term investment opportunity as regulatory hurdles are addressed and the technology becomes commercially viable.
Puplava highlighted AI, cloud computing, and robotics as transformative trends that will drive demand for energy and create investment opportunities in related sectors.
The Next Big Thing
As Puplava emphasized throughout the discussion, the convergence of these five megatrends is reshaping the US energy landscape at an unprecedented pace. The stakes are high: without significant investments in reliable and scalable energy sources, the US risks losing its technological leadership in AI and cloud computing.”This is the next big thing,” Puplava declared, underscoring the urgency of addressing the challenges facing the power grid. Whether through natural gas, modular nuclear reactors, or innovative grid infrastructure, the solutions to this energy revolution will define the future of the US economy—and present significant opportunities for forward-thinking investors.More By This Author:Revolt In The Bond Market: Why The Fed’s Rate Cuts Are Backfiring
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