20 January 2026 | 3:45PM EST Commodities Research Power Tracker: Data Centers Boosting Demand and Tightening US Power Markets Hongcen Wei +1(212)934-4691 | hongcen.wei@gs.com Goldman Sachs & Co. LLC Daan Struyven +1(212)357-4172 | daan.struyven@gs.com Goldman Sachs & Co. LLC Samantha Dart +1(212)357-9428 | samantha.dart@gs.com Goldman Sachs & Co. LLC Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, se ...

Key Takeaways NuScale Power is positioning its SMRs as always-on power solutions for AI-driven data centers.NuScale Power supports ENTRA1 and TVA plans to deploy up to 6 GW of nuclear capacity across U.S. sites.U.S.-Japan policy backing aids SMR, though growth depends on binding PPAs and project progress.NuScale Power (SMR) is benefiting from rising power demand from AI-driven data centers, which is becoming a major tailwind for the company. These Data centers need a lot of power every hour of the day, whic ...

17 December 2025 | 6:26PM EST Commodities Research Power Comment: Record Highs for US Data Center Growth and PJM Power Prices Hongcen Wei +1(212)934-4691 | hongcen.wei@gs.com Goldman Sachs & Co. LLC Daan Struyven +1(212)357-4172 | daan.struyven@gs.com Goldman Sachs & Co. LLC Source: Aterio, Goldman Sachs Global Investment Research Samantha Dart +1(212)357-9428 | samantha.dart@gs.com Goldman Sachs & Co. LLC 1 A PJM power generation capacity auction price is the uniform rate all selected power providers get p ...

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Clean Technology - Solar - **Outlook for 2026**: Positive growth trajectory for utility-scale solar driven by strong demand trends in the US and a favorable policy environment [1][2][3] Core Themes and Arguments 1. **Utility-Scale Growth**: - Utility-scale solar expected to grow at approximately 3% year-over-year in 2026, with revenue growth across coverage averaging around 15% due to price increases and expanded total addressable market (TAM) [2][19] - Companies like FSLR and NXT are well-positioned for solid growth due to strong domestic market share [1][8] 2. **Residential Market Reset**: - Anticipation of a 20% decline in residential installations in 2026 following the expiration of the 25D tax credit at the end of 2025 [3][39] - Shift in the residential market towards third-party ownership (TPO) models as cash/loan sales decline [19][39] 3. **Data Center Demand**: - Data centers are becoming a significant driver of solar demand, accounting for approximately 54% of new power generation in 2025 [3][20] - Increased power demand from data centers is expected to support solar growth, with projections of a 2.6% CAGR in US power demand through 2030 [20][50] 4. **Policy Environment**: - A cleaner policy backdrop entering 2026 with limited headwinds expected, following a year of uncertainty [4][21] - Monitoring of upcoming midterm elections as a potential catalyst for renewable energy policies [21][71] 5. **Valuation Insights**: - Solar equities have rebounded from early 2025 lows but remain undervalued compared to historical levels and other power-related equities [4][22] - Average upside potential of approximately 28% for Buy-rated names, with specific focus on utility-scale companies [11][77] Important but Overlooked Content - **Company-Specific Insights**: - FSLR is expected to see a bookings inflection and higher average selling prices (ASPs) throughout the year [8][12] - FLNC is positioned as a leader in battery storage with significant growth potential driven by data center demand [9][51] - ENPH's transition from a trough in Q1 2026 is being closely monitored for potential growth drivers [12][84] - **Market Dynamics**: - The residential solar market is experiencing a significant shift, with expectations of a drastic quarter-over-quarter decline in installations from Q4 2025 to Q1 2026 [39] - European residential markets remain weak, with companies like Otovo reporting a 25% revenue decline year-to-date [39] - **Investor Sentiment**: - Institutional ownership in the solar sector has decreased, leading to increased short interest, which is at its highest level in five years [25][31] - **Supply Chain Considerations**: - Despite efforts to reduce overcapacity in the solar supply chain, only modest impacts have been observed, with polysilicon prices increasing by 35%-40% year-to-date [91] This summary encapsulates the key points discussed in the conference call, highlighting the positive outlook for utility-scale solar, the challenges in the residential market, and the significant role of data centers in driving demand.

Summary of Clean Tech Industry Conference Call Industry Overview - The clean tech sector in North America is expected to see a resurgence in demand in 2026, driven by improved policy clarity and data center growth [1][2] - Key companies highlighted include GE Vernova (GEV), First Solar (FSLR), and Bloom Energy (BE) as preferred investment choices [1][5] Core Insights - **Demand Drivers**: The clean tech space has faced volatility due to changing policies, but a clearer federal policy is anticipated to drive strong demand in 2026. This demand is expected to be fueled by data center power needs and utility generation plans [2][3] - **Data Center Power Demand**: Projected to reach approximately 150 GW by 2030, accounting for about 75% of incremental power demand over the next five years. Overall electricity consumption is expected to grow at nearly 3% annually through the end of the decade [3][25] - **Renewable Energy Installations**: High installation levels for utility-scale solar and storage are projected, with expectations of around 34 GW of solar installations annually over the next five years. The market may experience fluctuations due to tax credit dynamics [4][11] - **Battery Storage Growth**: Significant growth in battery storage is anticipated, with costs expected to decrease to approximately $150/kWh by the mid-2030s. By 2035, it is projected that 50% of utility-scale solar projects will include storage [15][22] Investment Themes - **Preferred Stocks**: GEV, FSLR, and BE are favored for their ability to address market scarcity and provide quick power solutions for data centers. GEV is expected to benefit from increased turbine orders and a strong backlog [5][49][48] - **Market Dynamics**: The clean tech market is expected to see a shift towards renewables, with projections indicating that renewables will constitute 35% of the US capacity mix by 2030, up from 28% today [28] - **Risks and Challenges**: The utility-scale solar market faces potential challenges from new entrants and pricing pressures, particularly affecting companies like Shoals Technologies Group (SHLS) [55][56] Additional Insights - **Tax Credit Outlook**: The One Big Beautiful Bill Act (OBBBA) introduces new restrictions and tax credit eligibility criteria that will impact project financing and development timelines [19][21] - **Market Sentiment**: The sentiment in the residential solar market is cautious due to the loss of tax credits for cash and loan sales, which may lead to revenue declines for companies like Enphase [50][63] - **Long-term Growth**: The overall US power demand is entering a structural growth phase, with an estimated CAGR of 2.6% through 2035, driven by data center expansion and electrification [23][24] Conclusion - The clean tech industry is poised for growth in 2026, with strong demand driven by data centers and supportive policies. Investment opportunities exist in companies that can navigate the evolving landscape and capitalize on the increasing need for renewable energy solutions.

Group 1: AI Growth and Power Infrastructure - Power infrastructure is a key theme driving AI growth, particularly due to anticipated data center demand [1] - Battery stocks like EOS Energy and critical metals such as copper are highlighted for their upside potential [1] Group 2: Data Center Power Supply Initiatives - Four governors from Pennsylvania, Maryland, New Jersey, and Virginia proposed a plan to fast-track data center approvals for those generating their own power [2] - The initiative aims to alleviate strain on the PJM Interconnection, the largest U.S. power grid [2] Group 3: Energy Investments by Major Companies - Meta Platforms signed new power purchase agreements (PPAs) for 100% energy from Engie North America's $900 million solar project [4] - Amazon secured a long-term PPA with Avangrid for solar energy supply for its Pacific Northwest data centers [4] Group 4: Nuclear Energy Investments - Hyperscale data centers may require significant energy, leading companies like Amazon, Alphabet, and Microsoft to invest in nuclear energy [5] - Microsoft reached a PPA with Constellation Energy to restart the Three Mile Island Unit-1 reactor to meet energy demands [5] Group 5: Regulatory Support for Nuclear Energy - Regulators, including the Tennessee Valley Authority, are supporting the shift to nuclear energy by signing multiple PPAs for low-power and small modular reactors [6] - Stocks like NuScale Power are expected to benefit from this regulatory shift, along with GE Vernova and Hitachi [6]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: US Power Demand and Utilities - **Growth Rate**: Overall US power demand CAGR is increased to **2.6%** through **2030E**, up from **2.5%** previously, driven by data center demand and electric vehicles [1][3][17][18]. Core Insights - **Data Center Demand**: Data centers are expected to contribute approximately **120 basis points (bps)** to the overall **2.6% CAGR**, with **70 bps** coming specifically from AI data centers [3][20]. - **Capacity Requirements**: The capacity needed to meet data center demand is raised to **~82 GW**, up from **72 GW**, with a split of **60% natural gas** and **40% renewables** [1][6][30]. - **Power Demand Trends**: Weather-normal power demand has increased by **2.5% YTD** through July 2025, aligning with the long-term CAGR of **2.6%** [7][39]. Financial Metrics - **Valuation Multiples**: Regulated utilities are trading at an average of **~18x P/E** on 2026 estimates, close to the historical average of **17.6x**, despite higher EPS growth expectations [2][8][45]. - **EPS Growth**: The average expected **2-year EPS growth** is **7.4%**, which is higher than the last **10 years' average of 6%** [2][45]. Investment Opportunities - **Key Beneficiaries**: Companies expected to benefit from growing power demand include: - **AEP**: Anticipates **24 GW** of load growth contracted through 2029, driven by data center demand [49]. - **SO**: Expects **8% annual load growth** through 2029, with significant potential from large manufacturers and data centers [50]. - **DUK**: Forecasts demand growth accelerating to **3-4%** in 2027-2029 [51]. - **XEL**: Projects **5% aggregate load growth**, with upside potential from data center demand [51]. - **NEE**: Benefits from load growth through its unregulated renewable business, with plans to add **up to 46.5 GW** of renewable generation [51]. Additional Insights - **Data Center Contribution**: By **2030**, data centers are expected to account for **~11%** of total power demand, up from **~4%** in **2023** [18][28]. - **Electric Vehicle Impact**: Revised forecasts indicate that EVs will make up **6%** of overall cars on the road by **2030**, down from **7%** in previous estimates [18]. - **Capex Requirements**: The **82 GW** of new generation capacity translates to approximately **$103 billion** of capital expenditure needed through **2030E** [29][33]. Conclusion - The US power demand landscape is evolving with significant contributions from data centers and electric vehicles, presenting various investment opportunities in regulated utilities. The current valuation multiples do not fully reflect the expected growth, indicating potential upside for investors in this sector.

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **Power & Utilities** sector, particularly the demand and supply dynamics from 2025 to 2035, with significant emphasis on data centers and renewable energy sources [1][2][3]. Core Insights and Arguments 1. **Load Growth Projections**: Expected load growth of **2.4% CAGR** from 2025 to 2035, primarily driven by data centers (60% of growth) and electrification of vehicles and manufacturing [1][2]. 2. **Data Center Impact**: Anticipated **100 GW** of data center build-out over the next decade, contributing significantly to overall load growth [2][12]. 3. **Gas and Renewable Energy**: Gas generation is projected to grow at **2.3% CAGR**, with **164 GW** of new gas capacity expected by 2035. Renewables are expected to contribute nearly **60%** of incremental generation through 2030 [4][12][35]. 4. **Affordability Concerns**: Rising capacity prices (10x increase in PJM over four years) and electricity prices growing by **4% Y/Y** over the last five years indicate ongoing affordability challenges for utilities [3][19]. 5. **Coal Plant Retirements**: Anticipated **2/3rds withdrawal rate** for coal plants in retirement queue from 2025 to 2030, with significant battery storage installations to support intermittent power sources [6][25]. 6. **Capex Estimates**: Total capital expenditure expected to exceed **$800 billion** through 2035, with solar representing **42%** of the total spend [41][43]. Additional Important Insights 1. **Regional Focus**: Key regions for growth include **PJM** and **ERCOT**, with PJM expected to build **30 GW** of data centers by 2030 [5][39]. 2. **Nuclear and Wind Contributions**: Anticipated **7 GW** of nuclear uprates and **68 GW** of wind capacity additions, primarily onshore, with a focus on addressing intermittency issues [12][25]. 3. **Market Dynamics**: The interplay between reliability and affordability will be critical, with utilities needing to balance swift data center connections without significantly increasing costs for ratepayers [19][38]. 4. **Inflationary Pressures**: Capex inflation is a significant concern, particularly for gas and solar projects, which may impact overall project viability and timelines [42][43]. 5. **Long-term Outlook**: There is uncertainty regarding data center build-out in the 2030-35 timeframe, with estimates ranging widely and potential efficiency gains in power consumption expected [17][36]. Conclusion The Power & Utilities sector is poised for significant changes driven by data center demand, renewable energy growth, and the need for reliable energy sources. However, challenges related to affordability, regulatory scrutiny, and inflationary pressures will require careful navigation by industry stakeholders.

Group 1 - Enbridge Inc. (ENB) is well-positioned to meet the growing demand for reliable electricity from data centers through its natural gas transportation pipelines and renewable energy generation facilities [1][7] - The company continues to secure contracts from technology giants for supplying power and fuel from renewable projects and natural gas midstream infrastructures [2][7] - ENB has over 10 late-stage development projects aimed at supplying power and energy to data centers, enhancing its market position [2][7] Group 2 - ENB's midstream assets are strategically located near new data centers and natural gas-powered electricity generation units across North America, facilitating easy connections and incremental cash flows [3][7] - Other companies like Williams (WMB) and Kinder Morgan Inc. (KMI) are also positioned to meet the rising demand for cleaner power, with WMB focusing on behind-the-meter power plants [4][5] - ENB shares have increased by 26.7% over the past year, outperforming the industry average of 25.2% [6] Group 3 - From a valuation perspective, ENB trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 15.48X, which is above the industry average of 13.86X [9] - The Zacks Consensus Estimate for ENB's 2025 earnings has not seen any revisions over the past week, indicating stability in earnings expectations [11] - ENB currently holds a Zacks Rank 2 (Buy), reflecting positive market sentiment [12]

Industry Overview - Utility service providers are benefiting from increased electricity tariffs, accretive acquisitions, cost reductions, and energy-efficiency initiatives [1] - The power industry is also seeing improvements in electric infrastructure resilience against adverse weather and a transition to renewable energy sources [1] Capital Expenditures - Maintenance and improvement of utilities' infrastructure rely heavily on capital expenditures for updating and modernizing assets [2] - Utility providers are investing in output enhancement to meet the growing demand for data centers [2] Transition to Renewable Energy - U.S. electric utilities are evolving beyond revenue generation due to climate measures and federal incentives, positioning them for gradual growth in the clean energy sector [3] Investment Opportunities - Companies like PPL Corporation and FirstEnergy are becoming attractive investment options due to strategic investments in grid infrastructure upgrades [4] - PPL is focusing on infrastructure projects to reduce outages and enhance service resilience [5] - FirstEnergy has expanded its regulated activities and is benefiting from improved economic conditions and increased demand [7] Data Center Demand - In Pennsylvania, potential data center demand has increased to 14.4 GW, with a projected capital investment of $0.75-$1.25 billion [6] - FirstEnergy's long-term data center load demand has grown over 80% since February 2025, totaling 11.1 GW [8] Earnings Estimates - The Zacks Consensus Estimate for PPL's 2025 and 2026 earnings per share indicates increases of 7.69% and 8.33%, respectively [9] - FirstEnergy's projected earnings show a decrease of 3.8% for 2025 but an increase of 6.72% for 2026 [11] Return on Equity - PPL's current return on equity (ROE) is 8.81%, while FirstEnergy's is 11.31%, outperforming the industry average of 10.14% [13] Strategic Investment Plans - PPL plans $20 billion in regulated capital investments from 2025 to 2028 [14] - FirstEnergy has planned investments of $28 billion between 2025 and 2029 [15] Dividend Yield - PPL's dividend yield is 2.97%, compared to FirstEnergy's 4.09% [16] Debt Position - PPL has a debt-to-capital ratio of 55.47%, while FirstEnergy's is 64.56%, both compared to the industry's 59.75% [17] - Both companies maintain a times interest earned (TIE) ratio above 1, indicating financial flexibility [18] Investment Recommendation - PPL is currently favored over FirstEnergy due to better debt management and growth in earnings estimates, with both stocks holding a Zacks Rank 3 (Hold) [19]