Executive Summary
- The state of the market in the US in 2026 is that operators are trying to navigate the US utility bottleneck as the PJM projects a 5+ year wait on connections in the grid.
- It’s no secret that AI is playing the pivotal role in consuming far more power than traditional workloads; EPRI projects data centres will consume between 9% to 17% of US electricity by 2030, which is an increase from today’s figures of between 4-5%.
- Expect to see a huge wave of bring your own power and vertical integration over the next year as data centres are reshaping power markets.
It’s no secret that the US data centre market is miles ahead in capacity, innovation and growth in the AI race; but that doesn’t mean it doesn’t face similar constraints and bottlenecks to the rest of the world.
The region is singing the same song as the UK, the second largest market in the world; the power demand for these AI clusters is vastly outpacing the utility capacity, and that’s one of the major bottlenecks in the way of more growth to handle the intense AI demand.
Data centres are consuming more electricity
EPRI projects data centres will consume between 9% to 17% of US electricity by 2030, which is an increase from today’s figures of between 4-5%. Alongside this, AI is playing a growing role in data centre workloads and is estimated to account for 15-25% of data centre electricity today. It’s only set to increase as AI facilities increase, but it’s still uncertain just how much power it will take compared to traditional non-AI data centre workloads.
Data centres are now being developed faster than the grid can handle, at a larger scale than planning, regulatory and market-based institutions can manage, which is why the US have a major gridlock problem, delayed connection times and policymakers are struggling to guarantee low electricity costs, high reliability and rapid connection for customers.
Queuing for grid connections
If you want to build a data centre, you can’t just plug it into the wall sockets and voila – energy! You have to apply to PJM to connect to their transmission lines. AI’s explosion onto the scene and the fact that it’s hungrier than a two-year-old toddler terror going through a growth spurt has left the interconnection queue completely overwhelmed. It could take upwards of five years to even get approval to connect, let alone become fully operational. Companies can build a facility in two years, but then PJM needs 5 to 10 years to build the transmission wires and physical substations to power it. PJM officially warns that electricity demand is outpacing new power generation, with a projected capacity shortfall of over 6.5 GW.
At the end of last year, over 2,060GW of total generation and storage capacity were seeking grid connections, though most will be withdrawn due to the five-year delay in acquiring grid connections. Those who stick around for one will take longer to complete on average and become fully operational because of these delays. Most proposed capacity won’t be built; only 13% of the capacity that submitted connection requests from 2000 to 2019 were commercially operating by the end of 2024. While 10% were active, 77% of that capacity had withdrawn completely.
As you can imagine, power scarcity causes soaring market auction prices, resulting in political tension as the bipartisan coalition of US governors and the White House issued statements stating that data centres pay for their infrastructure upgrade to present the increase in price of local residential electricity bills.
Bring your own power is gaining popularity
Waiting in the queue for five years for a connection isn’t feasible for a lot of operators who need to be operational yesterday. US operators want to take a slice for themselves and be in the AI race, so they’re turning to on-site power generation to bypass the need for a grid connection.
Look at Talen Energy, for example; they developed the world’s first carbon-free colocated data centre campus with their Susquehanna nuclear facility. adn in March 2024, executed a transition to power AWS’s campus adjacent to Susquehanna, making the move to expand and supply electricity to Amazon using the grid for operations supporting AI tech at sites throughout Pennsylvania in June 2025.
Over the next year, we will see waves of vertical integration and bring your own power, gaining more popularity for operators to become viably operational. Hyperscalers and large colocation providers will produce their own power on-site, either by acquiring their own plants, building a private microgrid or striking behind-the-meter deals with nuclear and natural gas plants to bypass standard connection lines.
