How the blue wave could reshape US energy and data centres
The desk interprets the recent commentary as indicative of a more interventionist U.S. energy policy landscape following the midterm elections. Per the full note , energy affordability has emerged as a major voter concern, which implies that lawmakers will need to expedite new energy supplies while managing data centre costs. With Democrats set to lead Congress, a bipartisan push is anticipated to address these pressing consumer issues, impacting overall energy policy and infrastructure investment. We foresee this will have significant implications for FX markets, particularly in how energy policies influence the U.S. dollar's strength as they could affect inflationary pressures and economic growth.
What the desk is arguing
The desk frames this as a pivotal moment for U.S. energy policy, where increased regulatory oversight may help shield consumers from rising data centre costs. Newly elected officials will likely prioritize legislation that reflects the energy affordability concerns raised during the midterms, given that nearly 90% of voters identified it as a significant concern.
The pressure is mounting on lawmakers to find common ground that balances energy supply growth with cost containment. With 56% of voters indicating that the AI data centre boom influenced their voting preferences, the implications for energy production and consumption patterns are profound and could shift the landscape toward a more sustainable energy future.
Where it sits in our coverage
Our current consensus target for USD strength is 1.075, with a range from a low of 1.04 to a high of 1.12. Notable firms like jpmorgan have set targets around 1.10 for March 2026, aligning with our outlook, while bofa suggests a more conservative target of 1.04 for the same tenor.
While this view is robust, the desk's positioning at the upper bound of this consensus reflects a cautious optimism in how U.S. energy policy may bolster the dollar against its peers as supply-side improvements materialize.
How other firms see it
Aligned firms, including jpmorgan, suggest a strong bullish outlook on the USD, considering the anticipated infusion of capital into energy infrastructure. Conversely, bofa embodies a more cautious stance amid potential near-term volatility in energy costs and inflation.
Given this framework, strategies involving commodity currencies, particularly CAD and AUD, may become increasingly sensitive to U.S. energy policy initiatives, which directly correlate with local economic strength and energy price trajectories.
What the calendar says
With no high-impact calendar events immediately on the horizon for the U.S., the focus will remain on legislative developments and market responses to any emerging news, particularly related to energy policy advancements.
01Energy affordability was a dominant theme in the midterm elections.
02Democrats control Congress, pushing the agenda for expedited energy solutions.
03Consumer sentiment may shift due to rising costs linked to data centres.
04Future US dollar strength could be impacted by energy policy frameworks.
Market implications
Traders should monitor changes in energy regulations and consumer sentiment as they could influence USD pairs, particularly in relation to broad inflation trends. Watching levels around 1.075 could provide insight into market responses to legislative signals.
Risks to this view
A reversal in market sentiment could occur if the anticipated bipartisan cooperation fails to materialize or if energy costs rise uncontrollably, negatively impacting economic growth and confidence in U.S. fiscal and energy policies.
Articles How the blue wave could reshape US energy and data centres Published 13:30 Sustainability United States Translate Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Energy affordability shaped the midterms. A divided government will now face pressure to shield consumers from rising data centre power costs while speeding up new energy supply. Onshoring and trade protections will continue, despite higher near-term costs, as energy security remains a priority Coco Zhang After the midterm elections, the government will need to minimise data centre-related costs for consumers, bring new power supply online faster and protect supply chains.
Pictured: Data centre in Ohio Exit polls from the US midterm elections highlighted a key concern shaping voters’ decisions: energy affordability. Nearly 90% of voters said the cost of living was a crucial or major factor in their vote for Congress, with many pointing to gasoline and utility costs. Meanwhile, as the AI data centre boom strains power supply and infrastructure, 56% said the issue was a crucial or major factor in their vote.
With Democrats now set to control both the House and Senate, what does this mean for US energy and data centre policy? Newly elected lawmakers will face pressure to address these concerns, requiring the Democratic Congress and Republican White House to find common ground on shielding consumers from data centre-related costs and accelerating new power supply, including through permitting reform. Onshoring and supply chain protections are also likely to continue.
While they can raise near-term costs, they remain important to US energy security. Developments in all three areas could have significant implications for businesses. That said, Congress needs to strike a balance when drafting legislation aimed at achieving these goals.
More aggressive measures could face a veto from President Trump. Strengthened data centre regulation ahead, but the devil is in the detail The data centre industry is facing heightened local opposition. Recent polls suggest that around one in seven Americans is concerned about or opposes data centre development in their neighbourhoods.
In response to this issue, there is likely to be tighter data centre regulation. State-level policy will be more important to watch, as action is politically and practically easier at this level. The most likely approach is targeted regulation, much of which is already emerging.
This includes data centre-related taxes, reduced tax incentives, environmental standards, and requirements for developers to bear relevant cost increases. Outright moratoriums remain unlikely to become mainstream. Where they are introduced, they are more likely to be temporary, giving states time to develop a data centre policy framework.
At the federal level, the key unanswered question is how much authority should remain with the states and whether federal legislation should mandate state regulations or simply provide guidance. Republicans generally favour letting states lead, while Democrats tend to support a stronger federal role. We think sweeping data centre legislation is unlikely because of President Trump’s veto power.
Federal action is more likely to focus on affordability by protecting electricity customers from higher costs and formalising data centres' responsibility to help fund grid and energy infrastructure upgrades. Such measures could be added to broader legislation, such as must-pass spending bills needed to avoid a government shutdown, or a bipartisan package like permitting reform. More broadly on AI, we expect the Democratic Party to increase scrutiny of technology companies, as discussed here , while utilising the next two years to prepare an AI governance framework for 2028 and beyond.
However, tighter AI and data centre regulation is unlikely to fundamentally alter the industry’s growth trajectory. AI’s importance to US economic growth and competition with China will remain powerful drivers of expansion. Business implications State-level policy would more directly affect project siting, which is important for data centre companies to watch.
Where state rules are tighter, project development could slow. However, a more restrictive regulatory environment could also increase the value of data centres already approved or under construction, easing some of the industry’s capital constraints. Higher valuations could also encourage developers to be more selective and expand at a more measured pace, ultimately improving the quality of the project pipeline.
Developers should also treat community engagement as a strategic investment. Recent surveys show that while only 20-30% of Americans support local data centre construction, support can rise to 50-70% when there are accompanying community investments, such as in public infrastructure improvements or reductions in residents' costs. More developers are now signing binding community benefit agreements as part of project development.
Finally, sustainability will become more important for project development, not only to meet potential environmental standards, but also to build community support. Read more here . Americans' perceptions on local data centre construction, with and without community investment Source: ING Research, Verasight, Pew, Gallup, Heatmap "> Source: ING Research, Verasight, Pew, Gallup, Heatmap Enabling faster power generation through permitting reform Both parties support timely expansion of electricity supply to meet rising demand from AI and manufacturing reshoring.
They also generally agree that energy abundance can help reduce cost pressures. While Democrats and Republicans differ on the preferred energy mix, there is still common ground. Technologies likely to retain bipartisan support include nuclear, geothermal, carbon capture, and biofuels.
However, the greatest potential for policy action may lie not in specific technologies, but in permitting reform. Today, many energy projects can spend over five years navigating the federal permitting process. Around $240bn to $280bn of infrastructure investment across the eight sectors below enters the permitting pipeline each year.
Lengthy delays can therefore leave substantial capital tied up and project benefits unrealised. Average federal permitting time by sector in the US Years; orange represents the lower end of the range, while blue represents the higher end Source: McKinsey & Company, ING Research "> Source: McKinsey & Company, ING Research With both parties recognising the need for reform, the Senate introduced the Bipartisan American Affordability and Jobs Act (BAAJA) in September 2026. Key permitting proposals include: Speeding up approvals for energy projects Providing greater certainty and consistency across administrations Making it easier to permit power transmission lines Despite debate over its environmental impact, there is broad agreement that the BAAJA would meaningfully improve the permitting process.
The key question is whether it can become law under the current Congress. The Senate is expected to vote on 9 November, after which the bill would still need approval from the House and President Trump. Democrats may want to delay the bill and seek changes once they regain control of Congress next year, but doing so could increase the risk of a presidential veto.
This creates an incentive to reach a deal sooner rather than later. Even if the BAAJA does not pass under the current Congress, permitting reform is likely to remain a bipartisan theme. The growing need to expand power supply and infrastructure more quickly will keep pressure on future Congresses to streamline permitting.
Business implications For energy companies – both renewables and fossil fuels – the BAAJA could significantly shorten permitting timelines. If enacted, it would give project developers greater certainty, reducing the risk of litigation and permit cancellations. This could further expand project siting options for developers.
Nevertheless, in the very near term, projects may need to retain flexibility around their permitting strategy while the new policy framework is developed and implemented. Expect more protectionism and reshoring efforts against China dominance From clean energy technologies to the critical minerals that underpin much of the US economy, China controls a large share of global production capacity. Consequently, reducing reliance on China will remain a US policy priority.
Such efforts would increase rather than reduce project costs in the near term. But the long-term benefits of stronger domestic manufacturing and more secure supply chains could outweigh those costs. Global supply chain capacity distribution across various sectors Source: ING Research, BloombergNEF, International Energy Agency "> Source: ING Research, BloombergNEF, International Energy Agency This creates two key risks.
First, heavy reliance on China leaves US industries vulnerable to geopolitical tensions. We have already seen this with rare earths, where Chinese export restrictions contributed to disruptions for US auto manufacturers. Second, China’s supply chain dominance can put US manufacturers at a competitive disadvantage.
Building more secure energy and natural resource supply chains has long attracted bipartisan support in the US. The Trump administration has supported domestic rare earth production through funding, purchase agreements, and equity investments. In solar, China-focused trade and tax credit restrictions are also supporting the expansion of domestic manufacturing.
We expect this focus to continue. The executive branch could pursue further protective measures and is unlikely to face major opposition from Congress. Congress could also authorise additional funding to strengthen rare earth supply chains.
Furthermore, a Democratic-controlled Congress could push to extend clean manufacturing tax credits as part of broader negotiations with President Trump. Given the administration’s focus on countering China and expanding US manufacturing, an extension could emerge as a compromise in a broader legislative package under an optimistic scenario. All these efforts would also extend into future administrations.
Business implications For US companies: Clean energy companies and other industries that rely on rare earths, including semiconductors, AI, defence, and electronics, should have enough policy certainty to build long-term supplier relationships outside China. In the near term, however, diversification could raise supply chain costs as alternative sources may be more expensive. Solar could face particular cost pressures, as some tariffs on supply chain equipment also apply to non-Chinese suppliers.
For overseas companies: US efforts to build supply chains outside China are creating opportunities for manufacturers elsewhere. The US is supporting rare earth production in Australia and Brazil, while solar and battery suppliers in countries such as South Korea and Japan could benefit from stronger demand. This could also encourage more manufacturing investment in the US.
Meanwhile, European clean energy developers could face greater competition for non-Chinese supplies. While the EU has not imposed US-style tariffs, it is tightening restrictions on Chinese equipment through funding, procurement, auction, and subsidy rules. This could intensify global competition for non-Chinese suppliers and push costs higher.
United States Sustainability Energy production Elections Data centres Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Author Coco Zhang ESG Research Coco is based in New York, where she covers environmental, social and governance (ESG) topics, typically with a US flavour.
Prior to joining ING, she worked at Eurasia Group. Coco holds a dual… In this article Strengthened data centre regulation ahead, but the devil is in the detail Business implications Enabling faster power generation through permitting reform Business implications Expect more protectionism and reshoring efforts against China dominance Business implications