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Intersecting policy and market trends strain energy supply chains
Natural gas turbine shortage stymies growth in power generation
For the past 20 years, U.S. electricity usage had been relatively flat, even dipping down during the pandemic. Now data centers for artificial intelligence, crypto-mining, and electric vehicle adoption are driving up demand. Meanwhile, wholesale electricity prices rose by 40% in the first half of 2025, and natural gas prices followed the same broad upward trend.
In response, the U.S. administration is making efforts to grow domestic oil and gas production. But the turbines used to generate energy from natural gas are scarce. Natural gas turbine prices have nearly tripled in the past year and wait times are between three and seven years.
This is causing significant construction delays for utilities and for heavy industrial facilities such as refineries, steel mills, and chemical plants that rely on natural gas turbines for on-site power and steam generation. Some projects already in the building phase have even been abandoned due to timelines becoming unrealistic.
While waiting for new or replacement natural gas turbines, some companies are looking to the gas turbine aftermarket for performance upgrades, rotor lifetime extensions, and hot part replacements.
In addition to new generation capacity, energy companies will also need to step up transmission capacity. The United States needs to expand its transmission systems by an estimated 60% in the next five years and 300% by 2050. But U.S. tariffs on steel and aluminum as well as equipment shortages are slowing down progress.
C.H. Robinson’s energy experts can assist with planning for energy projects and redesigning energy supply chains.
Questions remain about EU natural gas purchases
As part of a U.S. trade agreement announced in August, the European Union says it intends to procure $750 billion in American liquefied natural gas, oil, and nuclear energy through 2028. The move buoyed the U.S. gas sector, but there are questions about its feasibility. Besides the need for infrastructure and shipping capacity, the EU would have to forego cheaper gas piped in from Norway.
At this point the deal is a framework; watch for details on its enactment.
Renewable-energy projects face new hurdles for tax credits
After the new U.S. federal budget passed earlier this year required new wind and solar projects to begin construction by July 2026 to receive tax credits, a change in the definition of “under construction” no longer allows many energy companies to use small upfront investments to qualify.
Previously, companies could secure the tax credits by spending 5% or more of the total cost by the deadline. Under new rules issued by the IRS that went into effect September 2, 2025, “physical work of a significant nature” must begin before July 5, 2026, and a “continuous program of construction” must be maintained. Only smaller projects with a maximum net output of 1.5 megawatts can still use the 5% standard and must meet it before July 5, 2026.
With this policy change, developers are already stalling projects or accelerating them to lock in the subsidies. Analysts say that the new rules may lead to the cancellation of up to 60 gigawatts of new solar capacity—enough to power about 10 million homes.
Consult your C.H. Robinson representative for further details; for scenario modeling to help project developers, owners, and suppliers make informed decisions; and for supply-chain planning to ensure timely project completion before the new deadlines.
Potential tariffs coming on wind turbines and components
In August, the U.S. Department of Commerce opened an investigation into the national security risks of imported wind turbines and components. Other such investigations have led to Section 232 tariffs of up to 50% on imported goods. This type of commodity-specific tariff would not be affected by the federal court case challenging the U.S. administration’s power to impose reciprocal tariffs or fentanyl-related tariffs on all goods from specific countries.
With a short public comment period of only 15 days, companies are advised to start planning for impacts to their wind-energy supply chains and projects now. Visit our Trade & Tariff Insights page to watch for news and sign up for alerts.
Further underscoring its policy of discouraging wind energy, in August the U.S. administration pulled the plug on the Revolution Wind project off the coast of Rhode Island, which was nearing completion with 45 of 65 wind turbines already installed. It also pulled $679 million in funding for 12 other offshore wind projects.