Noreva’s CEO to Infrastructure Investors: Regional Power Markets and the Early-2030s Air Pocket

What the Institutional Investing in Infrastructure interview covered

Arevalo asked seven questions. They ran from ERCOT price spikes and reliability, through what institutional investors should watch and how ERCOT, PJM and other regions differ, to underappreciated parts of the value chain, federal tax credit changes, the one trend Gardett will watch over the next 12 months, and where investors will find opportunities. IREI presents the text as an edited version of the conversation.

Gardett opened on ERCOT. He told Institutional Investing in Infrastructure: “The striking thing about ERCOT at the end of summer 2026 is how quiet things are.”

Record peak load brought few pricing breakouts, but the outlook looks different. He relayed a client’s line: “As a client told me, the nice thing about ERCOT is you can build; the tough thing is that everyone else can too.”

That edge weakened, he said, after a series of attempts across Texas to qualify, haircut and sequence data center buildout, ending with the governor’s pause. Infrastructure-style financing is harder, and the market now waits for December, when the Public Utility Commission of Texas has its first hearings planned.

On what investors should watch, he said, “Noreva models demonstrate that the underlying demand for power from AI is very real.” That cushions many business models and valuations, though not every deal at every price. His rule: heat economics and energy efficiency still matter. Wind and solar paired with batteries win on price, he said, natural gas wins on proven availability and energy intensity, and the more frontier approaches to powering AI should be priced as the frontier plays they are.

On regions, he put it plainly: “Power is still very regional.” Demand, he said, is set by renewable share and the likelihood of large load additions. CAISO and ERCOT lean on intermittent renewables, while MISO South and PJM lean on gas. Some hours now price much higher, so investors need to think differently about how they contract for power and how they monetize capacity and environmental attributes. He expects large load buildout to concentrate in places such as SERC and to touch CAISO and NYISO less.

Asked which part of the value chain is still underappreciated, he answered: “Midstream U.S. natural gas, without a doubt.” New offtake from LNG export terminals is flipping the supply and demand balance, he said, and tens of gigawatts of new gas demand from data centers will make that swing larger. The sector has been underinvested for years and remains unconcentrated, so he expects a combination of M&A and capex expansion.

On the July 2026 tax credit cliff, he said front-loaded solar in build-friendly regions such as ERCOT depresses the forward price view without fixing immediate shortfalls. He said the expected build beyond what fundamentals demand creates the likelihood of what Noreva has characterized as an “air pocket” in the early 2030s: as renewable deployment accelerates into the end of the decade, the grid gets temporarily flooded with intermittent power and prices fall enough to cause a sharp drop in renewable additions.

He expects markets to adjust by the second half of the 2030s, after a decade in which “no two generation projects will perform the same.”

Over the next 12 months he is watching Treasury rates and the Federal Energy Regulatory Commission’s large load rulings: “A change in FERC oversight of the bulk power system could shift not just the goalposts, but the entire playing field for every company and investor in the sector.”

He sees opportunity in volatility, in batteries paired with colocated renewables, and in transmission projects and very large gas-fired units, for which regulators are approving generous rate structures and capex plans. He closed on the balance: “That’s good news for the institutional investors who have raised historically large funds for infrastructure related to the AI economy and is one of the reasons I’m relatively calm about supply and demand ultimately balancing at a manageable level for the U.S. energy economy.”

Why it matters for institutional investors

The interview shows why Noreva builds merchant curves market by market: ERCOT, PJM and CAISO carry different renewable shares and different large load risk, so one national view fails. Gardett’s point that gas wins on proven availability is the same reading as the new class of buyers willing to pay for firm supply that he described in Noreva’s August 2026 press release. The air pocket is a timing risk that a single base case cannot show, and a wider FERC role is a federalization scenario to price. Those are the scenarios Noreva’s long-term forecasts are built to carry.