Executive Summary
Utilities in the U.S. are starting to invest in energy technologies they have never sourced before.
They are projected to spend about $1.3 trillion on capital projects between 2026 and 2030. Data center demand and grid modernization drive that spending. A growing share of this investment will go into technologies that barely existed as procurement categories five years ago.
Utilities already face mounting pressure from long lead times, tariffs, labor shortages and limited demand visibility. Projects involving emerging energy technologies face these same supply constraints, along with additional risks as supplier markets and manufacturing capacity gradually develop.
Our latest white paper examines how utilities can source materials and equipment for hydrogen, advanced nuclear reactors and long-duration energy storage. It tests each one against near-term and longer-horizon applications. The findings draw on interviews with senior utility supply chain leaders and GEP’s own research on supply chain capabilities and supplier readiness.
Each technology has its own distinct vendor risk. In hydrogen, electrolyzer manufacturing capacity sits far above demand. In nuclear, fuel production is concentrated among a small number of suppliers. These technologies need deeper project and counterparty due diligence than a conventional transformer purchase.
The paper also explores how to structure contracts around uncertainty, connect fragmented data through AI-enabled procurement and build the capabilities needed to manage these categories. A five-step blueprint shows procurement teams how to develop category strategies, qualify suppliers and account for risks before demand accelerates.
For utility procurement and supply chain leaders, the priority is building these capabilities now, before demand rises.
Frequently asked questions
Supplier markets are still developing. These technologies lack the established specifications and unit pricing of a conventional transformer purchase. They also rely on the same transformers and skilled labor as the rest of the capital program, so they carry the same lead times and tariff exposure.
Global electrolyzer manufacturing capacity far exceeds current demand. Vendor order books and financial positions can change quickly. Before committing capital, utilities should verify whether customer demand is contracted and assess whether the project sponsor has a strong balance sheet without subsidies.
Most of the fuel and coolant supply chains that advanced reactor designs depend on barely exist. HALEU and TRISO fuel production is concentrated among a few suppliers, and specialized fuel transport remains an emerging capability. Entering the market late can add billions of dollars to nuclear project costs.
Utilities should evaluate storage costs across the full discharge duration, not just upfront cost per kilowatt-hour. Contracts should have clauses to account for technology evolution. Performance guarantees should tie to how long the system can deliver power rather than capacity alone, a distinction that standard procurement evaluation frameworks often miss.
Contractors price in risks that are not fully understood. One municipal utility received an open-book estimate of about $140 million, but the EPC price exceeded $200 million. Progressive design-build can defer firm pricing until the project can be priced fairly.