August 13, 2026 • 4 min read
The resilient energy future of North America
Energy in North America: Where projects can stall at the grid
David Bahr
Capital and advanced technology are available, but infrastructure, permitting and governance structures need to keep up.
After more than a decade of relatively flat energy demand, North America is entering a period of structural growth across several markets.[1] Reference 1
Electrification, data center expansion, industrial reshoring and decarbonization are all advancing. These circumstances create an interacting set of pressures that reward resilience, execution capabilities and technical realism.
Not all projects will advance.
More than other regions, North America faces a unique combination of policy structures, market designs, infrastructure constraints and community concerns that increase execution risk, potentially resulting in forfeited gains.
It’s becoming just as important to understand where constraints are most likely to emerge as to identify growth opportunities.
Key takeaways
- Policy anchors have made many projects more viable, but infrastructure and governance constraints present difficulties.
- The US faces grid and permitting bottlenecks; Canada has varying outcomes between provinces with a rising voice from Indigenous groups to be part of new projects; and Mexico’s state-led model makes private capital cautious.
- Grid modernization is likely the single largest capital requirement this decade, but it is constrained by execution capacity linked to the workforce, permitting and supply chains.
The US: Maintaining momentum
The Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law remain primary policy anchors for energy investment. Together, they have made many projects that were previously marginal more financially viable.
However, policy certainty has weakened around the margins. Recent legislative activity and evolving guidance around prevailing wage, domestic content and credit transferability all affect which projects advance.
While policy remains important, structural constraints are increasingly shaping outcomes.
Even though capital and technology are readily available, projects are increasingly hampered by grid interconnection backlogs, transmission availability and multi-year permitting timelines.
Canada and Mexico: Sharing common constraints
Where the US primarily faces infrastructure and permitting bottlenecks, Canada and Mexico face governance issues that can shape whether projects are delivered.
Canada’s 2030 Emissions Reduction Plan and Clean Electricity Strategy outline a technically coherent pathway that emphasizes grid decarbonization, electrification and incremental deployment of large hydro and carbon capture, utilization and storage (CCUS) in industrial clusters.
However, execution varies widely by province. Transmission planning and cost allocation – particularly for cross-provincial projects – remain persistent bottlenecks. This complicates nationally integrated projects and favors regional developments.
In Mexico, recent reforms have strengthened the role of state-owned enterprises CFE and Pemex, reshaping dispatch rules, market access and private investment conditions.
Renewable resource potential remains strong, but near-term private deployment is constrained by regulatory uncertainty and evolving procurement mechanisms. Investment increasingly depends on public–private structures under state leadership, so private capital remains cautious despite recent improvements.
Unlocking North America’s grid
The electrical grid is central to every energy growth market in North America, including data centers, renewables, electric vehicles, hydrogen, biorefining and industrial electrification. While investment in the grid may not be new, it is likely one of the largest capital focus areas of this decade and the gating factor for growth in these markets.
US grid investment has accelerated but must roughly double by the early 2030s to support load growth and decarbonization.
The constraints are permitting and coordination. Transmission approvals routinely take longer than construction of generation assets and planning is fragmented across independent system operators (ISOs), states and utilities.In some states, the community opposition voice can be loud with the potential to de-rail project planning.
As renewable penetration rises across North America, storage is also quickly becoming a core grid asset. Four-hour batteries are now standard, while eight- to 12-hour solutions are emerging such as extended lithium systems, iron-air pilots and long-duration technologies.
This storage increasingly functions as its own asset class, stacking revenues across capacity, ancillary services, congestion relief and bilateral contracts.
Alongside renewables, there is growing momentum in extending the life of existing nuclear and pre-development of small modular reactors to provide firm, dispatchable power that is increasingly used to meet data center demand.
Beyond the power system itself, several adjacent growth markets are also attracting investment.
Betting selectively on winners
Investment is proceeding where policy, geology or mandate create the right conditions. Industry accounts for roughly 30 percent of US greenhouse gas emissions, making electrification and industrial decarbonization significant areas of focus.[2] Reference 2
CCUS will expand selectively, and it remains one of the few viable decarbonization pathways for cement, refining, chemicals, ethanol and hydrogen production. The expansion of the US 45Q tax credit has made certain projects investment grade, particularly where capture volumes are large and continuous.
Growth for this market will cluster where favorable geology, existing pipeline infrastructure and clear credit monetization align. The major risks remain permitting, pore-space access and long-term liability.
Hydrogen is more ambiguous. It is unlikely to become a mass-market energy carrier within five years, but niche growth is expected in refining, ammonia and chemical feedstocks.
Aviation remains one of the hardest sectors to decarbonize, making sustainable aviation fuel (SAF) a fast growing yet highly constrained transition market.
The US SAF market is forecast to grow to nearly US$7 billion by 2030, representing a compound annual growth rate of nearly 47 percent over six years.[3] Reference 3 Strong federal and stackable state incentives are narrowing the cost gap with conventional jet fuel.
Despite this momentum, SAF production remains two to five times more expensive than fossil fuel alternatives, and feedstock availability is constrained. Long-term offtake agreements are essential, and not all announced projects will reach a final investment decision.
Electric vehicle and battery manufacturing investments are critical enablers of electrification, and supply chains have become matters of economic resilience and national security. The US benefits from a strong, IRA-driven manufacturing pull, while Canada plays a strategic role in natural resources and upstream materials.
Recycling of lithium, nickel and rare earths is a fast-growing sub‑sector, easing raw-material constraints, dependency on China and reducing lifecycle global emissions.
Accessing the limited execution capacity
Compared to other regions, North America has strong policy incentives, deep capital markets and a broad technology base. However, several projects may still stall or fail to advance.
This is because the primary constraints are structural and they compound. Nearly every new generation, storage and large-load project requires grid interconnection approval, which can trigger lengthy permitting processes and expose fragmented planning across states, provinces, ISOs and utilities.
We work with our customers to identify and plan around key constraints from the earliest stages of feasibility through to project delivery. To start, test your approach and reduce future risk with our 2030 Energy Strategy Readiness Checklist.
David Bahr is a principal consultant at Worley Consulting with over 35 years of experience across the energy, chemicals and resources sectors. He focuses on industrial decarbonization – including CO2 capture and storage, low-carbon hydrogen and Power‑to‑X pathways such as sustainable aviation fuel and ammonia. David advises customers at the intersection of technology choice, execution risk and long‑term energy strategy. His work spans feasibility, front‑end engineering and strategic advisory, helping organizations identify where projects are most likely to stall and plan around those constraints from the outset.
[1] U.S. Energy Information Administration, “After more than a decade of little change, U.S. electricity consumption is rising again,” https://www.eia.gov/todayinenergy/detail.php?id=65264
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[2] US Environmental Protection Agency, “Inventory of US Greenhouse Gas Emissions and Sinks,” EPA, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks
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[3] MarketsandMarkets, “Sustainable Aviation Fuel (Biofuel) Market Size, Share & Analysis, 2026 To 2031,” https://www.marketsandmarkets.com/Market-Reports/sustainable-aviation-fuel-market-70301163.html
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