Data center power demand is growing faster than the US grid can keep up, and Bank of America just put a number on the shortfall. In a July 20 research report, the bank’s analysts project the country needs more than 230 gigawatts of new generating capacity over the next five years, while regulated utilities are on track to add only about 93 gigawatts. That leaves a gap north of 100 gigawatts, and data centers are the biggest reason.
The 100-gigawatt data center power gap
Data centers alone could pull roughly 125 gigawatts of new load through 2030, pushing overall US electricity demand to a 4.1% compound annual growth rate after a decade of nearly flat consumption. Utilities have raised their demand forecasts three years running, and AI computing keeps arriving faster than the grid plans for it. BofA’s own semiconductor team supplied the demand math, which tells you how tightly chips and megawatts are now linked.
One caveat cuts against the official figures: wind and solar count for less during peak hours than their nameplate ratings suggest, so ‘planned’ supply overstates what’s actually dispatchable when demand spikes.
Why builders are pouring on-site power
With the grid backed up, developers are building their own generation behind the meter. More than 7.5 gigawatts of data center projects with on-site power are already under construction, and another 60-plus gigawatts sit in pre-construction, per the report. Large gas turbines are essentially sold out through 2030, so buyers are shifting to reciprocating gas engines that ship and start faster. Caterpillar and others have expanded production to chase the orders.
What it means for the construction pipeline
For contractors, this is a decade of energy work hiding inside the AI story. Utilities are delaying coal retirements across states from Maryland to Nebraska, queuing up battery storage, and pushing transmission upgrades that take years to permit. The Champlain Hudson Power Express needed 16 years from plan to power. Construction Dive, citing the Bank of America report, summed up the new bottleneck bluntly: the market is no longer short on demand, it’s short on places power can actually be delivered.
Firms positioning for the next cycle should look past the server halls to the substations, gas plants and lines feeding them, an angle we track alongside builds like the Meta Sturgeon County AI data center. Read Utility Dive’s report for the grid-side detail.