Infra fundraising bounces back in Q1

After a tough period for infrastructure fundraising, Q1 set the stage for what promises to be a strong year for private infrastructure. Fundraising for unlisted, closed-end vehicles reached $48.2 billion raised, already more than half of all that was raised last year (Infrastructure Investor).

Large funds dominated the quarter, with particular focus on renewables and data centers.

U.S. shipping slowdown, a sign of what’s to come

The number of cargo vessels leaving China destined for the U.S. fell sharply this month, under a cloud of tariff uncertainty (Fortune).The transit time for container ships is 20 to 40 days, followed by up to 10 days trucking time. This leads to empty shelves as soon as end of May, early June (Apollo).

Renewables eclipse fossil fuels for full month

March 2025 marked the first time clean electricity sources provided more power to the U.S. grid than fossil fuels across the entire month. Clean electricity accounted for 50.8% of the U.S. electricity mix last month, led by wind and solar, with solar power increasing 37% compared to March 2024. Fossil generation decreased 2.5% from the same time last year (Ember, Canary Media).

Flexibility is key for the Texas grid

Although the share of fossil fuels in the U.S. electricity mix will continue to decline, natural gas will remain an important source of flexibility for some time. This dynamic is clear in ERCOT, where only two of 18 natural gas units in the Texas Energy Fund are combined cycle (Doug Lewin 🔒). Meanwhile, and making one chart in our latest slide deck frustratingly out of date even at time of publication, NextEra’s CEO estimates that that tariffs have increased the cost of new gas generation from $2,400 per kW to $2,600-2,800 per kW (Utility Dive).

Residential electricity price spike

The compound annual growth rate for residential electricity prices was 3% between 2001 and 2010 and 1% between 2011 and 2020. But since 2021 it has skyrocketed to 6% (Power Lines).

A steady decline for the Detroit Three

At the start of this century, the Detroit Three (formerly known as the Big Three) sold 29% of the world’s cars (measured in units). Now they sell 13% or so. Along with the geographical retreat there has been a product line retreat, with their U.S. product share only holding up within the truck segment (Car Charts). Sticking with automotive: Nearly 300,000 new EVs were sold in the first quarter of 2025 in the U.S., according to the latest report from Kelley Blue Book, an increase of 11.4% year over year (Cox Automotive).

AI = More emissions + more energy efficiency

The latest “Energy and AI” report from the IEA corroborates some of the widespread narratives around AI and electricity demand while dispelling others. The report forecasts that global electricity consumption from data centers – which currently account for 1.5% of global electricity use – will more than double by the end of the decade. The U.S. is expected to be a major driver, producing more electricity for data centers than for the production of energy-intensive goods like aluminum, steel, and cement combined by 2030. The data is less clear when it comes to AI’s climate impact – though powering AI is energy-intensive, its application can create many efficiencies, making claims that it will singlehandedly accelerate or solve climate change “overstated” (Axios, IEA).

Tariffs & trade wars, continued

The many twists and turns of the Trump administration’s tariffs regime have been well-documented. We don’t think it’s additive to include yet another account restating what has happened. The situation is also changing so rapidly that most current analysis becomes dated quickly: the PIIE tracker of the most notable trade actions by the U.S. and other countries counts ≈80 relevant actions since the start of Trump’s term (link).

Our expert view this month looks at the current state of tariffs from a “why this matters” lens, exploring what the tariffs mean and don’t mean for U.S. energy and infrastructure.

Budget resolution — and tax credit battle — move forward

Before breaking for a two-week recess, the House approved a budget framework that lays out where the eventual budget bill will make cuts and allow for spending increases. It sets a target of $1.5 trillion in spending cuts while proposing to raise the national debt limit. That target is both non-binding and lower than what some House members had proposed, meaning less tax credit cuts would be necessary (PoliticoPro 🔒).

As the budget process moves into the next phase, a group of GOP senators joined their colleagues in the House in urging party leadership to keep the IRA’s clean energy tax credits, citing the role they play in stimulating manufacturing and reducing electricity bills (E&E News 🔒). Some technologies have more support than others, particularly those like solar and wind that have had tax credits long before the IRA. Now starts the hard part as negotiators figure out what stays in the bill and what falls out. Over the next few weeks, details will emerge about what direction Congress will move regarding the provisions that were proposed

More calls to preserve federal funding

Sixteen GOP state lawmakers from the Pacific Northwest signed a letter urging DOE head Chris Wright to keep $4 billion in federal funding intact for seven regional hydrogen hubs (link). Meanwhile, a group of energy industry leaders wrote a letter to Wright voicing their support for the DOE’s Loan Programs Office and warning of the negative effects its budget and staffing cuts could hold for the administration’s American energy dominance agenda (link).

DOE backs nuclear and data centers

The  DOE reissued $900 million in funding for nuclear small modular reactor (SMR) projects (Power), and identified 16 federal sites as possible locations for data centers, with aims to have them operational by 2027 (Utility Dive, DOE).

Executive orders won’t save coal

Heightened demand for electricity is set to extend the life of some coal assets for a short number of years, but its resurgence will be limited. It is not competitive against gas or renewables and will continue its decline despite policy noises. Among them: President Trump signed a spate of executive orders focused on boosting U.S. coal production by directing federal agencies to remove coal regulations and expedite permitting processes, help halt coal plant retirements, prioritize coal mining on federal land, and invoke the Defense Production Act (White House, PoliticoPro 🔒, Canary Media).

State laws come under fire

Another Trump executive order aims to dismantle state-level laws designed to reduce fossil fuel production and emissions, calling them a threat to American energy dominance. Targets include California’s cap-and-trade emissions reduction program, Washington state’s cap-and-invest program, the Regional Greenhouse Gas Initiative, and New York and Vermont’s climate superfund laws (White House, PoliticoPro 🔒).

While the order sends a message about the Trump administration’s energy agenda, it lacks the legal authority needed to overturn state laws (NYT 🔒, E&E News 🔒, Carbon Risk). Case in point: California Governor Gavin Newsom is seeking to extend the state’s cap-and-trade program (The Hill).

More state & local updates

Challenges to California’s climate disclosure law and vehicle emissions standards continue to make their way through the legal system. The Supreme Court signaled it would resurrect a lawsuit filed by fuel producers contending the state’s vehicle emissions rules are illegal (CNN), while the California Chamber of Commerce and the state’s business community continue to spar over whether California-based businesses should have to adhere to the law’s reporting requirements while its legal proceedings play out (PoliticoPro 🔒).