• The Grid Cannot Keep Up

    A structural power demand shock, driven by electrification, digitalization and industrial growth, is creating a generational investment opportunity in distributed energy infrastructure

Rising Electricity Demand

The United States is experiencing a structural shift in electricity demand unlike any in a generation. Electrification of transportation and industry, the rapid expansion of computing infrastructure across sectors, and broader economic growth are pushing consumption significantly higher. Analysts project U.S. electricity demand will grow approximately 2% per year through 2030 — a pace the existing grid was not designed to accommodate.

This is not a cyclical fluctuation. It reflects a fundamental rewiring of the American economy from internal combustion to electrification and from centralized computing to distributed, energy-intensive digital infrastructure.

Grid Bottlenecks

The U.S. transmission grid was engineered for a different era. Interconnection queues now stretch five to seven years in most major markets. Utility capital expenditure timelines are measured in decades. Regulatory permitting for new transmission lines can take longer still.

The result is a widening gap between power demand and grid-delivered supply. Businesses, institutions and communities that require reliable, uninterruptible power cannot wait for the grid to catch up. Many are turning to distributed, clean, onsite solutions (microgrids, power generation, and battery storage) to secure resilient power independent of grid constraints.

Why Distributed Energy

Distributed energy systems address the grid constraint directly by generating and storing power at the point of consumption, bypassing transmission and distribution bottlenecks. These systems typically operate under long-term contracts with creditworthy counterparties.

The U.S. Department of Energy describes microgrids as “essential building blocks” of the future grid. Installed U.S. microgrid capacity has expanded rapidly over the past decade and continues to grow as the economics of distributed generation, energy storage, and control systems improve.

The Mid-Market Gap

Mid-market distributed energy projects ($5mm - $50mm in total capex) represent the majority of the distributed energy opportunity set, yet they are often overlooked as a result of capital markets structure:

  • Global infrastructure funds cannot deploy capital efficiently at this scale

  • For many corporations, project costs exceed capex budgets, and there is often a strong preference to keep energy infrastructure off balance sheet

  • Commercial banks provide debt but rarely take equity positions in pre-operational or early-operational assets

Otis is specifically designed to address this structural gap, creating attractive entry opportunities for a focused and institutionally staffed investment manager.

Otis’ Opportunity

By financing distributed energy projects for commercial and industrial customers, Otis provides the resilient infrastructure enabling broad electrification and economic growth. Our investments are subject to long-term contracts, delivering stable, predictable cash flows underpinned by creditworthy counterparties.

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