Energy in Reset — Why the Future Still Tilts Renewable
I can’t count the number of times I’ve been asked some version of: “What’s really happening in renewable energy?” It’s a fair, and complicated, question. After a decade of relentlessly good news—cost declines, surging adoption, ample capital—the headlines in 2024–2025 have been troubling. Projects have been canceled or delayed. Developers have stumbled. Financing costs have climbed. The political environment (at least in the US) is hostile. For those watching the sector closely, it feels as though the narrative has shifted from smooth inevitability to uneasy turbulence.
In a recent letter to investors, David Crane, the new CEO of Generate Capital and a veteran of the energy industry, captured the moment with clarity: “The mood has gone from exuberance to pessimism… and both are wrong.” That line rings true to me. The sector wasn’t flawless when money was free and optimism unchecked, and it isn’t broken now that capital is scarce and the real-world frictions of building infrastructure have become visible. What we are living through is a reset—a return to fundamentals.
Crane went further, noting that the exuberance of recent years sometimes bred sloppy discipline: projects underwritten on heroic assumptions, developers overextended, investors too quick to equate vision with execution. Now, as interest rates (and thus the cost of capital) remain stubbornly higher and supply chains remain clunky and uneven, those weaknesses are being exposed. This is of course difficult, but it’s also healthy. Resets are clarifying. They separate hype from substance.
From where we sit at Align, several lessons stand out at this moment:
Fundamentals matter most. The era of “growth at any cost” is over. Projects must stand on real economics, resilient offtake agreements, and credible operating partners. Details like grid interconnection, long-term maintenance, and capital structures that work even in the absence of tax subsidy tailwinds are no longer secondary—they are decisive.
Volatility is a filter, not a failure. Easy conditions hide weak business models. Rising costs and tighter capital reveal them. The result of this shifting dynamic will be fewer, more resilient players as projects pass from weak to strong operators—an uncomfortable but necessary evolution.
Consolidation is inevitable. The sector remains fragmented, with too many midsize developers chasing easily-underwritten opportunities. Market pressure will drive mergers, acquisitions, and exits, ultimately leaving a more robust - if narrower - field of operators.
Renewables are infrastructure, not ideology. As Crane reminded us all, this is not just about climate ideals or financial models. It’s about execution in the physical world: steel in the ground, crews on site, equipment maintained for decades. Vision inspires, but execution determines outcomes.
Patience pays. Transitions are never linear. Railroads, oil, telecom, and the internet each went through messy boom-bust-consolidate cycles before reshaping the economy. Renewables are following a similar path. Short-term turbulence will not derail the structural arc towards a cleaner, cheaper energy nexus.
And here’s why that structural arc still points firmly forward for renewables: demand for energy is exploding. The rise of AI and the proliferation of data centers are driving an insatiable appetite for new electrons. Analysts project that U.S. data center power demand could more than double by 2030,[1] and Goldman Sachs estimates global data center electricity consumption may rise by 165% by the end of the decade.[2] At the same time, the International Renewable Energy Agency reports that in 2024, 91% of newly commissioned utility-scale renewable projects delivered power more cheaply than the lowest-cost fossil alternative.[3] In other words: meeting new demand will require an “everything on the table” approach—and renewables are often the cheapest, fastest, and most scalable part of the solution.
We should also acknowledge that we are all learning valuable lessons in this reset. As pioneering impact investors, your capital is helping to steward the entire industry through this critical time of recalibration—helping to shape a stronger, more disciplined, and ultimately more resilient clean energy sector.
At Align, our role is to keep you positioned within that trajectory, with the discipline, selectivity, and perspective that this moment requires. The turbulence is real, but so is the destination: the world must decarbonize, renewables must be built and Align’s clients will remain critical suppliers of impact capital far into the future.
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Footnotes
[1] International Energy Agency, "AI is set to drive surging electricity demand from data centres" (2024).
[2] Goldman Sachs, "AI to drive 165% increase in data center power demand by 2030" (2024).
[3] International Renewable Energy Agency (IRENA), "Renewable Power Generation Costs in 2024" (2025).
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