BlackRock’s Fink Calls for Reliable US Power Grid—Now

BlackRock Inc.’s Larry Fink wants expanded and reliable U.S. and EU power grids—and now, not 10 or 20 years from now.

“We need energy pragmatism,” Fink, the co-founder, chairman and CEO of the $12 trillion investment management firm, wrote in his annual letter to shareholders March 31.

“That starts with fixing the slow, broken permitting processes in the U.S. and Europe. But it also means being clear-eyed about our energy mix.”

While electric-power investments have been flowing to renewables in the past two decades, U.S. energy demand needs reliable, 24/7 dispatchable power.

“Without major breakthroughs in storage, wind and solar alone can’t reliably keep the lights on,” he wrote.

“In the near term, more than half the electricity powering [generative AI] data centers must come from dispatchable sources. Otherwise, the air conditioning will shut off, the servers will overheat and the data centers will shut down.”

Interior Secretary Doug Burgum concurs.

“We are in a serious, serious position right now with a grid where we tilted way too far to intermediate unreliable sources,” Burgum told the audience recently at the CERAWeek by S&P Global conference in Houston.

Fink wrote in his letter, “In both the U.S. and the EU, it usually takes longer to permit infrastructure projects than to construct them. A high-voltage power line can take 13 years to get approved—something China does in a quarter of the time.”

Burgum said in Houston that the U.S. faces the risk of “losing the AI arms race to China. And the only way we win the AI arms race against China is that we have electricity.”

Permitting debacle

California’s bullet-train project is an example of the permitting debacle, Fink wrote, citing the book “Abundance.”

The 1,800-mile Transcontinental Railroad was built in six years in the 1860s.

“These days, six years is roughly the amount of time it takes California to realize that its bullet train needs to be pushed back by another decade,” the book’s authors, Ezra Klein and Derek Thompson, wrote.

“In the time California has spent failing to complete its 500-mile high-speed rail system, China has built more than 23,000 miles of high-speed rail.”

Fink wrote that investment opportunity among individuals globally is stunted if lacking power.

“We can’t democratize investing if it takes 13 years to build a power line,” Fink wrote.

Retirement investments represent about a third of capital flows in the U.S. stock market.

But “giving retirement investors access to infrastructure matters less if the infrastructure never gets built,” he wrote. “That’s often the case today.”

What’s next?

One option Fink likes is small modular nuclear reactors (SMRs), calling them “everything ‘old nuclear’ wasn’t—cheaper to build, safer to run and you can build them anywhere.”

China isn’t taking its time with atomic power, he said.

“They’re building 100 gigawatts of nuclear, which—when completed—will mean they supply half the planet’s nuclear power.”

As China moves at breakneck speed, indecision paralysis in the West is setting in and BlackRock is getting pulled in different directions.

BlackRock reported to the British parliament in 2022 it would not stop investing in fossil fuels and that decarbonizing economies wasn’t its job, according to a Reuters report.

In a statement that included all-caps, BlackRock posted on its website in January of 2023, “We DO NOT boycott the energy industry.”

The firm reported $225 billion in investments in public U.S. energy companies. “Despite these investments, BlackRock has recently been accused of ‘boycotting’ oil and gas companies,” it wrote.

In 2024, Texas was kicking BlackRock out of managing any of the state’s $53 billion school fund for retreating from oil and gas investing.

Meanwhile, BlackRock shareholders have called for votes to require BlackRock to divest further out of fossil fuels.