Investor Essentials Daily

This company will address the energy demand coming from AI

May 30, 2024

The rapid growth in AI and increased investments in data centers over the past decade have placed significant demands on the global energy infrastructure, driven by rising needs in cloud computing, machine learning, and IoT devices.

Willdan Group (WLDN) has positioned itself as a key player in addressing these challenges by offering energy efficiency services, demand management, energy auditing, and integration of renewable energies.

Its LoadSEER platform helps utilities manage loads and defer infrastructure upgrades, while their engineering services support clean energy projects.

Willdan’s strategic acquisitions enhance their capabilities, enabling them to assist in creating a more efficient and low-carbon energy future.

With the ongoing expansion in AI and cloud infrastructure and the push towards decarbonization, Willdan is expected to experience sustained demand and strong growth.

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The massive growth in AI and investment in data centers in the past decade have put tremendous strain on global energy infrastructure.

As data processing and storage needs continue to skyrocket due to the proliferation of cloud computing, machine learning, and Internet of Things devices, the demand placed on electricity generation and distribution networks has grown exponentially.

We now require more power than ever before to keep our increasingly digital world running smoothly. Unless significant upgrades are made to power generation capacity and grid stability, it is likely this energy demand will persistently outpace supply in the coming years.

Willdan Group (WLDN) has strategically positioned itself as a key player in addressing this challenge.

Willdan provides energy efficiency and demand management services such as retro-commissioning and retrofits to optimize existing building energy usage through no/low-cost measures.

The company also conducts energy auditing and benchmarking to identify savings opportunities from behavioral changes or equipment upgrades.

Additionally, Willdan offers demand response and flexible load management programs to better integrate renewables and on-bill financing solutions to help customers implement recommended projects.

In terms of data analytics and software, Willdan’s LoadSEER platform uses smart meter data to model load profiles and predict the impacts of distributed energy resources, helping utilities defer or eliminate costly infrastructure upgrades.

Willdan also provides engineering and program management services including design and construction management for clean energy projects like solar PV, energy storage, microgrids, and electric vehicle charging.

The company administers various state-level incentive programs that drive demand for efficiency solutions.

Through strategic acquisitions of companies like Integral Analytics, Willdan has expanded its software capabilities, geographic footprint, and ability to offer turnkey solutions.

By delivering this well-rounded suite of services, Willdan is directly assisting utilities and their major commercial/industrial customers in transitioning to a more efficient, resilient, and low-carbon energy future.

Continued expansion of cloud/AI infrastructure will drive the need for more data center capacity and efficiency upgrades.

Ambitious decarbonization targets and renewable energy mandates set by governments and corporations will create sustained demand for Willdan’s advisory and implementation services.

Aging infrastructure in need of modernization and “right-sizing” through load profiling/forecasting, non-wires alternatives and integrated grid solutions is another specialty of Willdan.

Post-pandemic supply chain disruptions and inflation will incentivize greater focus on local/distributed energy resources and resilient microgrids.

Given these powerful trends, Willdan is well-positioned to capitalize on favorable demand drivers over the next 5+ years.

Best regards,

Joel Litman & Rob Spivey
Chief Investment Strategist &
Director of Research
at Valens Research

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