Electrification Sparks: Not Enough Supply

One of the surest signs of the desperate need for electrification investment to bring supply in line with rising demand happened this summer. Every year PJM, a regional transmission organization, that coordinates the power grids across 13 states in the East, sets a power capacity auction. PJM is the largest power grid operator in the United States, serving 65 million customers from Chicago to New Jersey. Power auctions are a way for PJM to make sure there is enough capacity on a forward-looking basis to cover demand. It pays for the availability of this capacity (passing the cost to consumers). Grids need capacity as demand fluctuates and disruption happens. For the 2026/2027 delivery year prices to clear this auction hit a record high of $329/MW-day. Just two years ago this price was $29/MW-day, suggesting a large demand supply mismatch¹.

There were signs that the electricity supply is starting to respond, and investment is going in. Nearly 2,669 MW in the auction were marked as new generation and uprates – something that was not a feature of the last three grid auctions. Plants are also being run longer, 1,100 MW of capacity that was due to retire in the region has withdrawn that notice. These old plants need equipment upgrades and maintenance to continue operations.²

Source: PJM - as of 22nd of July 2025

In order to meet rising power demand, investment not only needs to go into new generation capacity but also upgrading and improving grid infrastructure. Companies that benefit from this trends include:

• Itron, that makes metering hardware and software, providing a key source of data for grid operations.
• GE Vernova, the global leader in manufacturing gas turbines.
• Hubbel, a maker of grid management software helping utilities balance supply and demand especially in the face of an aging grid.

Disclosures

Some of the companies highlighted are holdings of the Tema Electrification ETF portfolio. Please see fund page for complete holdings information. Holdings are subject to change.

Electric companies require extensive investment in capital improvements and additions, including the construction of additional transmission and renewable generation facilities, modernizing existing infrastructure, installation of environmental upgrades and retrofits as well as other initiatives. Electric companies may provide services at rates approved by one or more regulatory commissions.

MW = A unit of power representing one million watts.