The American Energy Transition: Grid, Gas, and Green - Sector Initiation - Power and Energy Transition

Research evidence excerpt

The American Energy Transition: Grid, Gas, and Green - Sector Initiation - Power and Energy Transition

Sunaina Ocalan .+1 917 344 8503 sunaina.ocalan@bernsteinsg.com 16 June 2026

5. Existing US grid infrastructure is not equipped to deal with the level of power demand

growth we are seeing (and forecasting) and we expect electrification businesses to

be the beneficiaries of the grid upgrades required. While cautiously optimistic, we

anticipate VPPs and GETs (Virtual Power Plants, and Grid Enhancing Technologies) will

play a big role in optimizing power systems. We like GEV, not just for its robust power

business, but also for its continued focus on the electrification segment, which we think

will be a cornerstone of the US grid in the coming decades.

6. Existing, clean firm power generators such as VST, and CEG have a major role to play,

especially in the congested PJM market, where capacity prices have recently run up.

VST has derated after the initial AI exuberance, and we now see fundamentals-driven

upside from capacity and price growth, supported by the contracting potential of

existing assets. CEG was a name synonymous with nuclear, and we see upside with

more contractible power. We like the Calpine acquisition adding (natural gas) balance

to the (primarily nuclear) portfolio as it provides more dispatchable power. We are

Outperform on both.

7. While grid connections and upgrades are pending, Behind The Meter (BTM) solutions

that can deliver reliability and connect quickly are advantaged. In the era of growing

power demand, speed to market and reliability are in favor. We like BE’s solution

(solid oxide fuel cells), but see the stock as expensive at current prices (BE- Market-

Perform). We are Outperform on FRVO (Enhanced Geothermal) as another promising