US data center development is colliding with the limits of the power grid, as utilities warn of regional capacity shortages and developers face long waits to connect new load. The constraint is shifting from land and capital to electricity availability.
Data center electricity demand in the United States is projected to reach about 75.8 gigawatts in 2026, up from roughly 53 gigawatts in 2023, and accounts for nearly half of all projected US power demand growth through 2030. The median time to secure grid interconnection approval has risen to about 54 months, while a data center can be built in roughly two years, creating a structural mismatch. In the fourth quarter of 2025, developers added only about 25 gigawatts to their project pipeline, half the prior quarter's pace, a sign the bottleneck is already slowing growth.
The cost effects are concentrated in stressed regions. In the PJM market that stretches from Illinois to North Carolina, total wholesale power costs surged 49 percent in 2025, driven by a 262 percent jump in capacity costs tied to data center demand. Analysts estimate data centers added billions of dollars to the regional capacity market, with residential bills rising in several states. Utilities say they cannot build generation and transmission fast enough to keep pace.
Source: Fortune - https://fortune.com/2026/03/18/power-grids-snags-electricity-limits-data-centers/