Open Circuit State of the transition: The biggest fights in energy
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Mar 20, 2026 Michael Sembalist, chairman of market and investment strategy at JPMorgan and author of the Eye on the Market energy reports, offers a data-driven take on the biggest fights in energy. He breaks down debates on data centers and grid capacity. He discusses oil shock fallout, LNG and emerging markets choices. He also weighs costs and promise of CCUS, green hydrogen, SMRs and industrial electrification.
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LNG Expansion Faces Capacity And Financing Limits
- U.S. LNG export growth is constrained by terminal capacity and financing for new greenfield projects because long‑term offtake contracts are scarce.
- Michael says projects need billions and fewer counterparties remain, making new liquefaction financing harder.
China's Cheap Modules Supercharge Solar Adoption
- Solar plus batteries adoption is accelerating globally, aided by Chinese manufacturers producing modules at loss‑making margins that flood global markets and lower prices.
- Michael credits Chinese policy forcing companies to operate at deep losses, which nonetheless accelerates worldwide deployment.
Make Hyperscalers Internalize Grid Integration Costs
- Expect hyperscalers to absorb integration costs because power is only ~10–15% of data center lifetime cost, so require them to pay for incremental grid impacts when necessary.
- Michael argues hyperscalers will pay more for reliable access since uptime and speed drive their economics.