Data centers accounted for half of all new U.S. electricity demand growth in 2025, according to the IEA. Not half of tech sector growth. Half of everything. The AI boom has collided with a grid built for a different century, and the collision is reshaping how power gets bought, built, and delivered.
Goldman Sachs Research projects U.S. data center power demand will climb from 31 gigawatts in 2025 to 66 GW by 2027 — more than doubling in two years. Electricity demand from data centers soared by 17% in 2025, and AI-focused facilities climbed even faster , the IEA reported. Driven by data centre investments, the capital expenditure of five large technology companies surged to more than $400 billion in 2025 and is set to increase by a further 75% in 2026 . That's not speculative investment. It's contracted capacity with signed power agreements — and the grid can't deliver it fast enough.
Can Clean Energy Keep Pace?
It cannot, at least not at the prices tech companies were counting on. The average North American solar power purchase agreement price rose 4.7% during the first quarter of 2026, while wind prices rose nearly 8%, with solar and wind PPA costs up 13% and 24%, respectively, since this time last year , according to LevelTen Energy. The Financial Times reported that clean power purchase agreements — the contracts favored by Google, Meta, and Amazon — are expected to rise sharply as Biden-era subsidies end.
Offers on LevelTen's marketplace have already increased by $2 per megawatt hour to $8 per megawatt hour since the bill's passage in July , with the lowest offers rising faster than the median. LevelTen Energy estimates that solar PPA prices will need to increase by $8/MWh to $17.50/MWh to remain economic without the tax credits . And that's before accounting for the real bottleneck: Power availability—not capital—is the primary constraint on data center development, with electrical grid interconnections often taking up to four years , according to a Ropes & Gray analysis.
The supply crunch is structural. 29% of developers surveyed by LevelTen said they plan to suspend or cancel projects as a result of the reconciliation bill . Developers cite issues such as labor shortages, tariffs, rising insurance costs and permitting issues, with wind energy enjoying particularly strong demand but remaining in scarce supply as growing scrutiny of wind permits at the federal level means new-build wind projects have "completely fallen off the map" in regions such as PJM , Rob Collier of LevelTen told Utility Dive.
Who Pays When the Grid Can't Deliver?
National Grid just answered that question with a $1.75 billion check. National Grid Ventures plans to invest $1.75 billion for a 35% stake in Joulent, forming a strategic partnership to deliver contracted power solutions for U.S. data centers and other large loads . The money helps fund a 2.67GW gas plant in West Texas, built with Chevron, that will supply a Microsoft data-centre campus under a 20-year deal .
The structure is telling. The investment, a 35% minority stake in Joulent LLC, funds a structure that deliberately avoids the public electricity grid , the Eastern Herald reported. National Grid — a company that operates transmission grids — is investing nearly $2 billion to bypass its own business model. National Grid CEO Zoë Yujnovich characterized the investment as "a disciplined, partner-led investment in contracted critical infrastructure for the AI-driven large load economy" . Translation: the regulated grid can't move fast enough, so hyperscalers are building their own.
PJM Interconnection, the largest U.S. grid operator, is managing the fallout in real time. PJM's most recent long-term load forecast shows its peak load growing by 32 GW from 2024 to 2030 — with almost all the growth coming from data centers . PJM's last two capacity auctions set record-high capacity prices, which has led to bill hikes in parts of the grid operator's footprint . The PJM Interconnection can curtail data centers and other large loads that have backup generation under an emergency order issued May 18, 2026, by the U.S. Department of Energy .
That's not a theoretical policy. It's an operating procedure. The board's January 2026 proposal made this explicit, establishing that data centers without co-located generation would be curtailed ahead of residential and commercial customers during emergencies — an operating policy that went into effect this summer , Startup Fortune reported.
