Soochow: The logic of power shortage in North America continues to evolve, emphasizing investment opportunities in various technological paths.

Soochow released a research report stating that on the demand side, the surge in the U.S. AIDC project has led to non-linear growth in U.S. electricity demand. On the supply side, the total supply in 2025 will temporarily meet the demand, but in the long term, the U.S. faces a situation of stable supply decreasing and regional power shortages. Investment in power shortages in North America is gradually shifting from gas turbines to gas internal combustion engines and SOFCs. Currently, the power shortage in North America is still greater than the total capacity supply of various technologies, so this sector has not yet reached the stage of choosing a technological path, and investment opportunities in various technological paths should be of importance. The main points of Soochow are as follows: The current power shortage in North America is a contradiction between the non-linear growth CKH HOLDINGS of AI power demand and the aging of power grid infrastructure. On the demand side, the surge in the U.S. AIDC project has led to non-linear growth in U.S. electricity demand. On the supply side, the total supply in 2025 will temporarily meet the demand, but in the long term, the U.S. faces a situation of stable supply decreasing and regional power shortages. (1) Decrease in stable supply: the aging of the power grid, frequent power outages, and inability to meet the 100% reliability of AIDC's power generation requirements; coal power is about to face a new peak of decommissioning, wind and solar power are unstable, and the construction cycle of nuclear and geothermal power is too long, relying only on natural gas power to meet the current gap; (2) Regional power shortages: by 2024, more than 50% of data centers are chosen to be built in Texas, California, and Virginia, putting pressure on regional power supply. The U.S. power grid operation is decentralized and has poor regional interconnection, such as in 2025 when the PJM grid experienced multiple emergency controls due to interregional power imbalances. Based on the contradiction between supply and demand in North America and the continuous growth of AI capital expenditure, NERC predicts that the average peak power shortage in the U.S. will exceed 20GW from 2027 to 2030, with Texas, the Mid-Atlantic, the Midwest, and California facing significant risks; the DOE predicts that the average peak power shortage in the U.S. will reach 20-40GW in 2030. Taking into account factors such as cost, construction period, environmental protection, etc., gas turbines are the most optimal solution for self-built power generation by AIDC currently, with gas internal combustion engines, SOFC, and diesel engines as effective supplements. (1) Gas turbines: Combined cycle gas turbine power generation efficiency can reach over 60%, with the lowest electricity cost per unit. The current installed capacity of gas turbines is showing an accelerating upward trend, and the global new installed capacity in 2025 is expected to quickly approach the highest point of the previous cycle. Leading gas turbine companies such as GEV, Siemens, and Mitsubishi Heavy Industries have orders for delivery scheduled up to 2029; (2) Gas internal combustion engines: Slightly lower in power generation efficiency compared to combined cycle gas turbines, but advantageous in rapid delivery and deployment. The leading company Wrtsil saw a 111% year-on-year increase in new equipment orders for Q1-Q3 2025, with orders scheduled for delivery up to 2028; (3) SOFC: Although high in power generation efficiency, commercialization and cost control of this technology are in the early stages, and the short-term inability for this technology to become mainstream is due to the cost per unit of electricity and capacity release; (4) Diesel generator sets: With the advantage of rapid start-up and shutdown and the optimal solution for backup power supply, leading company Cummins saw a year-on-year increase in related revenue of approximately 20% for Q1-Q3 2025. Risk warning: AI data center investments fall below expectations, international trade frictions, and climbing production capacity fall below expectations.