Technology Company Finds Revolutionary US Energy Potential

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For many years, a vast region of the U.S. spanning 13 states, from Illinois to New Jersey to North Carolina, enjoyed an abundance of electricity, reported Naureen S. Malik for Bloomberg on July 29. This area, served by PJM Interconnection LLC, had historically more than sufficient power to meet its needs.

But data center developers are converging on the nation’s largest grid to support the burgeoning demands of the artificial intelligence (AI) industry. According to PJM’s independent market monitor, there is no longer excess power available to support the massive data campuses currently in development, and tech companies are now expected to supply their own power generation.

Signs of strain have become evident, Malik reported. Over the past five weeks, PJM has issued nine level 1 energy emergency alerts, signaling concerns about maintaining adequate power reserves. This is a stark increase from last summer, which saw only one such alert. Typically, the summer season is when U.S. power suppliers experience peak demand. The first alert from PJM this year came in late June, during a period of extreme heat that drove electricity demand to a 14-year high.

However, not all alerts were due to high temperatures; two earlier this month were mainly due to unexpected power plant outages, the Bloomberg report said. Despite these challenges, PJM has managed to continue operating smoothly after each alert, but the increasing frequency of these notices and the calls for emergency power underscore the pressure on the system.

This issue was highlighted further last week when PJM announced the results of its annual capacity auction. The payouts to generators and other suppliers reached a record US$16.1 billion for the year starting June 2026. Moreover, the auction fell short by 208.7 megawatts.

While this deficit is small compared to the over 134 gigawatts secured, it marked the first time the auction failed to meet its target, as noted by Monitoring Analytics, the PJM watchdog, Malik reported.

"The reliability threat is not on the future horizon," said Federal Energy Regulatory Commission Chairman Mark Christie last week, according to Malik. "It is actually here now."

Increasing Electricity Bills

In some areas within PJM Interconnection's territory, which serves 67 million customers, electricity bills are expected to increase by over 20% this summer, reported Laila Kearney for Reuters on July 9. This region also hosts the highest concentration of data centers globally.

Although high auction prices are intended to encourage the construction of new power plants, this has not occurred swiftly enough in the PJM region. This is compounded by the retirement of older power plants and a surge in demand from data centers, Kearney said.

PJM attributed the current supply and demand challenges largely to external factors, including state energy policies that have led to the premature closure of fossil-fuel power plants and the rapid expansion of data centers in Northern Virginia's "Data Center Alley" and other emerging hubs across the Mid-Atlantic.

"Prices will stay elevated as long as the growth in demand outpaces supply — this is a fundamental principle of economics," PJM spokesperson Jeffrey Shields told Kearney. "At this moment, we are in critical need of every available megawatt."

Recent years have seen approvals for new projects capable of generating about 46 gigawatts — enough to power 40 million homes. However, “these projects are stalled due to local opposition, supply chain delays, or financial issues that are unrelated to PJM,” explained Shields.

The demand from data centers continues to rise sharply. By 2030, PJM anticipates an additional 32 gigawatts of demand on its system, with nearly all of that increase attributable to data centers.

Executive Order Targets Buildout of Data Centers

Writing on July 25 for U.S. Global Investors, Frank Holmes noted that government policy often sets the stage for significant change. He said what's happening with AI in the U.S. is a "full-blown industrial revolution, and it's being backed and subsidized by the federal government like few things I've seen before."

President Donald Trump has enacted an executive order that could herald a new chapter in U.S. manufacturing and energy sectors. With a single signature, the White House has elevated AI data centers and their essential infrastructure — such as semiconductors, transmission lines, and power generation — to a national priority status.

This designation means expedited permitting processes, reductions in regulatory barriers, access to federal lands, and the potential for hundreds of billions of dollars in new investments to surge into this sector over the next decade.

"I believe that what’s happening right now with AI is similar in scale and ambition to the defense buildout of the Reagan years or the shale revolution of the 2010s," Holmes continued

The July 23 executive order aims to facilitate the construction of large-scale AI data centers requiring over 100 megawatts of power. This substantial energy demand is essential for training and operating cutting-edge AI models, representing a significant leap in computational capacity.

Earlier this month at the Pennsylvania Energy and Innovation Summit, Trump revealed over US$90 billion in new private capital commitments aimed at AI and energy infrastructure development, Holmes noted. This substantial investment includes US$25 billion from Alphabet (the parent company of Google) and an additional US$25 billion from the alternative investment firm Blackstone, both earmarked for the creation of AI data centers and natural gas facilities in Pennsylvania.

The choice of Pennsylvania is strategic; the state is positioned over the Marcellus Shale, one of the world's largest natural gas reserves, providing a plentiful and cost-effective energy source for the power-intensive new AI centers.

According to McKinsey & Co., the worldwide cost to expand AI data centers is projected to reach an astonishing US$6.7 trillion by 2030. Out of this, US$5.2 trillion is designated for facilities specifically designed to support AI operations. This figure is almost incomprehensible, amounting to more than double the GDP of Germany, Holmes said.

Despite PJM managing to maintain operations smoothly after each alert, the regularity of these alerts, along with cautions that power generators must be prepared to activate emergency supplies, highlights the pressure on the system. This strain was further emphasized when PJM announced the record results of its annual capacity auction, Holmes wrote.

On July 22, AInvest's Ticker Buzz noted, "The rapid deployment of large data centers has led to a sustained high level of earnings for power generators. These new facilities consume as much electricity as small towns, coinciding with the closure of many old power plants and delays in new power investments and grid upgrades. The situation underscores the need for innovative solutions to manage the energy consumption of AI operations."

Eguana Technologies Inc.

One company that understands these issues is Eguana Technologies Inc. (EGT:TSX.V; EGTYF:OTC). It recently shifted its focus from consumer-driven rooftop solar markets to utility-driven grid infrastructure channels, a strategic pivot was aimed at leveraging Utility and Distributed Energy Resource Management Systems (DERMS) partnerships in anticipation of advanced batteries becoming essential for transforming power grids into distributed networks.

Advanced battery solutions, particularly those implemented behind the meter, are crucial for enhancing the capacity and reliability of existing grid infrastructures, according to the company.

These solutions enable utilities to more effectively manage edge-of-grid generating assets, adding crucial capacity to the existing grid, along with management of renewable energy sources such as wind and solar, while also providing consumers with backup power during grid failures. Eguana's suite of hardware and software solutions is tailored for utility-level power grid management and includes comprehensive Virtual Power Plant (VPP) capabilities. These capabilities encompass demand response, voltage and frequency control, backup power, fleet aggregation, spinning reserve, and real-time grid edge visibility and analytics.

"2024 witnessed the continued downturn of consumer-driven rooftop solar markets and catalyzed a strategic acceleration for Eguana towards utility-driven channels, focusing on the power grid transition and a distributed grid," Eguana Chief Executive Officer Justin Holland said. "Our hardware and software solutions, designed for delivering grid services at the grid edge, are now crucial as utilities increasingly invest in necessary deployments. Our technology distinctly excels at the utility level, providing the much-needed capacity and reliability to the existing grid infrastructure."

Eguana's Evolve hardware and its Cloud and Edge software platforms offer real-time management and visibility solutions at the grid edge for utilities and DERMS partners. As the power grid evolves into a distributed network, energy storage assets will play a pivotal role in grid management.

'Seamless to the Consumer'

Eguana is utilizing its innovative VPP technology to revolutionize how residential and commercial structures, equipped with smart batteries, actively participate in the electrical grid. These VPPs combine smart batteries situated at the grid's periphery in homes and businesses with sophisticated software that adeptly handles energy storage and distribution.

This technology not only stores surplus energy but also releases it during times of high demand. "The process is seamless to the consumer," Holland said.

In a recent initiative, the Canadian utility BC Hydro, also known as British Columbia Hydro and Power Authority, has embarked on a project to transform residential homes into VPPs using Eguana’s battery storage solutions.

The Peak Saver project by BC Hydro is designed to provide a continuous power supply and improve grid flexibility. The initiative enables batteries to provide backup power during outages and deliver electricity during peak times. BC Hydro manages the Eguana Technologies Evolve LFP 14kWh/5kW batteries remotely to maximize their efficiency during periods of high demand.

Adrian Dix, the Minister of Energy and Climate Solutions for the province, described VPPs as a "groundbreaking approach to test the future of energy management and build a more resilient, efficient, and sustainable power grid overall."

BC Hydro emphasized that by adjusting energy usage, participants not only alleviate overall system demand but also receive monetary benefits. Each installation generates ongoing revenue for Eguana through its integrated software and hardware solutions. The Evolve hardware works in conjunction with Eguana’s Exchange and Edge cloud platforms, which enable comprehensive system-level management via a DERMS.

Analyst: Grid Structure At or Close to Its Limits

*Technical Analyst Clive Maund has commented on the company's prospects, stating, "The rickety traditional centralized grid structure is at or close to its limits and requires transformation. The advantages of this transformation will be huge — a massive increase in capacity, vastly more efficient utilization of power generated, decreased demand on centralized power generation, and protection of the end user, corporate or private, from power outages."

Maund said he views the stock as having an "exceptionally positive risk/reward ratio" and rates it a Strong Buy for all time horizons, with price targets ranging from CA$0.20 to CA$2.

Ownership and Share Structure

According to the company, about 0.5% is owned by management and insiders.

24.6% is held by the Japanese ITOCHU Corp., the company said.

The company's market cap of CA$3.61 million, according to Refinitiv. Its 52-week range is CA$0.05 and CA$0.20.