Transition Finance Weekly - March 5, 2026
Geopolitical turmoil, Disconnecting data centers, TX and NC Primary Elections
1. War in Iran Reshapes Energy
Amidst a highly fluid situation, the Trump Administration tries to mitigate energy price spikes as it triggers regional war.
The Israeli and American-launched war against Iran in the Middle East has plunged the resource-rich region into chaos, as American-aligned Persian Gulf countries are now facing retaliatory strikes from Iran. QatarEnergy, which supplies 20% of the globe’s natural gas, is halting production and export of natural gas. A significant share of Israeli, Iraqi, and Saudi fossil fuel capacity is also halted.
The war-driven disruptions are causing significant price spikes in global oil and gas prices. The price impact is also translating directly to consumers: gasoline prices in the United States jumped by nearly 20 cents since last week. The Trump Administration is reportedly offering insurance and US military assets to protect fossil fuel shipments through the Strait of Hormuz, 80% of which are destined for Asian markets.
This is yet another reminder of the significant risks inherent to fuel-based energy systems that go beyond simple infrastructure costs. Renewables must be a core part of each country’s energy security formula, and are key to protecting energy systems from geopolitical shocks.
Rocky Mountain Institute Founder Amory Lovins in Brittle Power (1982): “A key feature which helps to make these energy sources resilient is that they are renewable: they harness the energy of sun, wind, water, or farm and forestry wastes, rather than that of depletable fuels.”
2. Data Centers’ Other Reliability Threat
As recent incidents in Virginia have shown, data centers abruptly dropping off the power grid can present significant reliability risks for grid operators.
In a series of incidents in 2024 and 2025, dozens of Virginia data centers suddenly dropped off the grid after problems from high-voltage power lines. The data centers totaled around 2,000 MWs worth of energy dropping off the grid virtually instantly.
Grid operators are charged with keeping the grid stable. In the context of data centers, most of the attention goes to ensuring that data centers have access to enough power. But the opposite is also true: grid operators also have to make sure there is enough demand to meet real-time energy supply.
While the Virginia incidents did not rise to the level of “emergency,” according to PJM, the North American Electric Reliability Corporation has warned that the risk of larger grid impacts as a result of load shedding is growing with the growth of data centers.
Mike Bryson, Senior VP for Operations at PJM: “It didn’t cause an emergency, but I would say it caused concern. What we’re worried about is, what if that happens for 3,000 megawatts or 5,000 megawatts?”
3. CARB Sets Climate Disclosure Timeline
CARB will exempt insurers from meeting climate disclosure rules as other sectors prepare to report by August 16, 2026.
Last week, the California Air Resources Board approved the California Greenhouse Gas Reporting and Climate Financial Risk Disclosure Initial Regulation, which sets up the regulatory framework under SB 253 and 261, two climate disclosure bills passed in 2023. CARB paused enforcement of SB 261 pending the outcome of litigation.
SB 253 requires corporations that operate in California with over $1 billion in annual revenues to report Scope 1 and 2 emissions beginning in 2026, and Scope 3 emissions beginning in 2027.
Over the objections of bill sponsor Senator Scott Wiener and former Insurance Commissioner Dave Jones, CARB exempted insurance companies from complying with its regulations, claiming that they were subject to duplicative regulations by the California Department of Insurance. Wiener argued that the Board did not have the authority to circumvent the legislature’s intent to cover insurance companies, while Jones said that the CDI’s regulations were voluntary.
SB 253 sponsor Senator Scott Wiener, in response to CARB’s exclusion of insurance companies: “The Legislature’s intent with respect to the insurance industry is crystal clear. [...] The law of California is that the insurance industry is included in SB 253’s carbon disclosure requirement. I do not believe that the board has the authority to remove an industry that was included by the Legislature.”
4. California PUC Pushes More Renewables
California’s Utility Commission is looking for 6GW of clean grid additions before tax credits expire.
Last week, the California Public Utilities Commission proposed a new framework to add 6 GW of new clean energy to the grid between 2029 and 2032. The CPUC’s decision is driven largely by a desire to “pursue any viable projects” that can qualify for federal tax credits before they currently expire.
The CPUC is seeking 2,000 MW of new clean capacity by 2030, and an additional 2,000 MW in each of 2031 and 2032. The development of the resource procurement plan is being done alongside CAISO’s transmission upgrade planning.
California is continuing its leadership in renewable energy deployment, despite significant headwinds from the federal government, and has met RPS milestones ahead of schedule.
CPUC President Alice Reynolds said, “California is the model for how to proactively plan and successfully procure the clean energy assets capable of powering the world’s fourth largest economy.”
5. Matched Clean Capacity the Way Forward
Google is paying for its own clean capacity at its planned Minnesota data center.
Google announced a new data center complex south of Minneapolis that drew attention not because of its size, but because of what will be the world’s largest iron-air battery. Google will partner with Xcel Energy and Form Energy, a battery maker, to power its data center campus with 1,400 MW of wind, 200 MW of solar, and a 30 GWh battery. Google will also help fund an Xcel-run distributed battery program.
Google is becoming the first hyperscaler to use Form Energy’s unique battery chemistry. The company’s strategy isn’t all rosy, however: Form Energy has yet to finish its first commercial battery installation, and Google is looking to bring 179 diesel generators to a planned Indiana data center.
Still, Google’s latest deal is a significant bet on long-duration energy storage, which could prove to be a significant leap in the already ongoing renewable and energy storage revolution.
SPOTLIGHT: Primary Elections in North Carolina and Texas
Voters went to the polls in North Carolina, Texas, and Arkansas on Tuesday, where most eyes watched the hotly contested Senate seat in Texas. In that race, Democrat James Tallarico will now face either incumbent Senator John Cornyn or Attorney General Ken Paxton in November pending the outcome of the GOP primary runoff. Paxton has been a key leader in the multi-state, activist-led anti-ESG campaign. Meanwhile, in North Carolina, former Governor Roy Cooper won the Democratic Primary for Senate and Michael Whatley won the GOP nomination, setting the top of the ticket for a critical Senate race.
Down the ballot in North Carolina, the three Democrats who helped Republicans override Governor Josh Stein’s veto of SB 266 lost their seats by wide margins to challengers. SB 266, now law, suspended interim emissions reductions targets for Duke Energy, allows utilities to charge consumers for incomplete power plants, and is expected to cost North Carolinians $23 billion in future costs. Two of the candidates, Democratic Representatives Carla Cunningham and Nasif Majeed, both of whom voted to override Stein’s veto on SB 266, each failed to break 30% support in their respective primaries.
