March 2, 2026

The below transcript is a translation of the podcast audio that has been machine generated by Notta.

Hi everyone, this is Taylor St. Germain with ITR Economics. Thanks so much for joining me on this episode of Trends Talk. We at ITR, your apolitical and unbiased source of economic intelligence. And today I wanted to talk about energy, in particular electricity.

On a previous TrendsTalk episode, we discussed the impact of building all of these data centers and what it means for higher electricity prices, and of course, that is still very much the case today. We are seeing the electricity producer price index soar to new record highs and data centers, although not the only driver of that, but one of the primary culprits of it. As we’ve looked at the data center space over the last 12 months, really for all of 2025, we built about $40 billion worth of data centers when you look at our private data center construction data set.

Now, I’m not going to focus on data centers today. Like I said, we’ve already done that in a previous TrendsTalk, though I will update you more on the future. My focus today is more on the electricity side of it, more on the electricity infrastructure and the opportunity that this industry really poises from a growth standpoint. In our December 2030 update that our colleagues, Lauren and Brian, our chief economist, held they talked a lot about the energy markets being one of the long-term drivers of growth as far as industry goes. We really highlighted eight industries in that webinar that we were focusing on that would be helpful market categories for 2030. Those eight industries were food, insurance, hospital, medical, pharma, all grouped into one, medical labs and equipment in one group, and then electrification, pets, defense, and physical AI and cybersecurity. Those were the eight primary industry groups.

I wanted to focus on electrification today. There is going to need to be significant growth, as far as electrification goes, as it relates to the demand that we’re seeing here in the US. One of the data series that we often focus on as we understand the market from an overall perspective is electric power transmission, control and distribution production. This is another data set that is sitting here at a record high today, again, for good reason, as we all would expect. But what’s interesting about this data set is when industrial production sagged in ’24 and ’25 where we saw primarily negative growth rates in industrial production. This component of industrial production did not sag, it grew all throughout that timeframe. So it goes to show the demand we need for energy and power to keep up with all of this growth we see in the US economy and for data centers.

Now, when we look at which electricity generation sources really grew in 2025, the leader was still solar. The year-over-year growth rate for solar electricity generation was 35.7%. And I think a lot of folks assumed that as the Trump administration came into office, and as some of those potential tax advantages go away, that we were going to see a big reduction in the renewable energy space. That was not the case based on how the data came in for 2025. Again, renewables as a whole were up about 9% year-over-year. And again, the way I’m looking at this information, this data comes from the EIA and it comes in kilowatt hours. So again, 35.7% growth in solar, overall renewables up 9%, while fossil fuel was only up 0.4% on a 12/12 basis. So you can still see that many private and public utilities industries are still putting a very strong emphasis on renewables as a solution to this lack of energy problem that we really have here in the US. Petroleum was up 17%, so I don’t want to minimize that for all of our oil and gas friends out there. And natural gas does still hold about 45% of the market share. Again, that data lags behind a little bit, so we will get some more updated market share numbers as we move deeper into this year.

But my message here is this is a space that we’re very excited about, not just in the near term. But even as we move into that 2030 downturn, the electrification space is going to be needed, that infrastructure that goes along with it is going to be needed. And again, there’s still a pretty big bet with renewables that are going on today, even as the administration changes, folks, as you know, we’re apolitical, we look at the data. But when you look at some of the changes in policy, we can’t ignore that. But it shows that even with some of the potential policy changes as it relates to some of the favorable advantages of renewable energy from a tax perspective, could potentially go away, we’re still seeing a lot of investment as we look at that renewable space.

As we look forward, you know, one area that we often highlight as well more broad based is that infrastructure related projects tend to actually increase during downturns. If you look at 2008 2009, in the financial crisis, we saw streets, highways, infrastructure related projects actually grow during 2008 2009, while the economy was sagging. And that was also the case during the pandemic. When we saw that V shaped dip in GDP, we saw infrastructure investment actually increasing from a dollar value perspective. So my call to action here is, let’s understand which areas as far as electricity generation goes, are growing, that’s important to understand. But also, this is a space you’re going to want to be in to diversify yourself from maybe some of the painful impacts that other industries will face as we look at 2030. Energy is top of our mind, electricity is top of our mind, we’re seeing higher cost, it’s driving our thoughts on higher inflation in the second half of the decade. But it’s also a growth industry that you’re going to want to be a part of, a little bit of a double edged sword to say the least.

We’ll continue to update you on this as we talk more about inflation, as we look more at the growth that we’re expecting to see in data centers in the years to come. For now, I hope you found this information helpful. My name is Taylor St. Germain with ITR economics. Thanks for joining me on this episode of TrendsTalk. Please like and subscribe to TrendsTalk wherever you listen to your podcasts. Look forward to seeing you all in the next one. Thanks so much. Take care for now.