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Data centers can strain local power grids because they add large amounts of electricity demand at a small number of connection points, often faster than utilities can build the substations, lines and other infrastructure needed to serve them. Utilities respond with a mix of construction, better use of existing equipment, flexible connection agreements, storage and demand response. Which measures work—and who pays—depends on the location and the project’s grid studies.
Why data-center demand can outpace the grid
Large loads are concentrated at specific sites
A data center can require a substantial supply through a particular substation or set of transmission and distribution connections. That concentration means the key constraint may be local: a substation, line, voltage limit or another part of the network may lack headroom even when the wider grid has enough electricity in aggregate. A project’s connection therefore depends on studies of its specific location and demand profile, not simply on a national supply total. The International Energy Agency (IEA) notes that real-world hosting capacity must account for constraints including voltage, short-circuit limits and substation capacity.
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Electricity use is growing, but annual energy is not the same as peak capacity
The IEA estimated global data-center electricity consumption at 485 terawatt-hours (TWh) in 2025 and projects about 950 TWh in 2030—roughly 3% of global electricity demand that year. It reported global data-center electricity demand grew 17% in 2025, while demand from AI-focused data centers grew 50%. These are global figures; TWh measures energy used over time, not the peak power capacity a particular grid connection must supply. AI-focused demand is a subset of data-center demand, not a separate amount to add to it. (IEA, 2026, Key Questions on Energy and AI.)
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In its 2026 grids analysis, the IEA says planning, permitting and completing new grid infrastructure can take 5 to 15 years, compared with 1 to 3 years to build a data center. It also reports that grid-equipment prices nearly doubled over the five years referenced in that analysis. When a new facility is ready before its connection or required upgrades, the mismatch can delay service or force a utility to consider temporary operating limits while longer-term work proceeds. The IEA estimates global annual grid investment would need to rise about 50% from USD 400 billion by 2030 to meet forecast demand; that is a global estimate, not a spending commitment by any particular utility. (IEA, Electricity 2026.)
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What grid queues do—and do not—tell you
A connection queue is a pipeline of projects seeking grid access, not a count of projects certain to be built or a direct measure of how much capacity data centers alone require. The IEA’s 2026 global summary says more than 2,500 gigawatts (GW) of renewable, storage and large-load projects—including data centers—are stalled in grid connection queues. Separately, the Federal Energy Regulatory Commission (FERC) reported 2,289 GW of active interconnection-queue capacity at the end of 2024, down from 2,368 GW in 2023. FERC’s figures cover multiple resource types in the United States; neither total is a data-center-only tally. Queues also change as projects advance, withdraw or are re-studied. (IEA, 2026; FERC, 2025.)
Queue size alone does not prove that a specific community is “out of power,” that a project will cause an outage, or that customers’ bills will rise. Those claims require local evidence: the utility and connection point, relevant system studies, planned investments and the rules for allocating costs.
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How utilities and system operators respond
No single option fits every constraint. Some approaches create durable capacity but take years; others can make existing capacity more usable or provide earlier access with operating conditions. The measures below can be combined, but each still depends on local network studies and reliability requirements.
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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errors| Response | What it can do | Timing and limits | Cost or risk question |
|---|---|---|---|
| Build or upgrade infrastructure | Add or reinforce transmission lines, substations and other grid components to address durable network constraints. | Provides a long-term remedy, but planning, permits, equipment procurement and construction can take years; the IEA’s 2026 estimate for the full process is 5 to 15 years. | Who funds the upgrades and how costs are allocated among the new customer and other grid users must be determined under applicable rules; there is no universal outcome established here. |
| Get more from existing assets | Grid-enhancing technologies (GETs) and operational changes can increase usable capacity on existing infrastructure. IEA examples include dynamic line and transformer ratings, advanced power-flow control, topology optimization, storage used as a transmission asset, reconductoring and voltage uprating. | May help while larger projects advance, but the amount of capacity available depends on local conditions and study assumptions. It cannot remove every physical constraint. | Suitability and the investments required vary by network; the IEA’s global estimate does not establish a project’s local result. |
| Offer a flexible or non-firm connection | Permit a customer to connect before all reinforcements are complete, subject to agreed limits—such as reducing or shifting demand during constrained periods. | Can provide earlier access than waiting for every upgrade, but service is conditional rather than an unrestricted, firm supply. The customer needs to understand when and how its load may be curtailed. | The agreement must make curtailment obligations and risks clear. FERC’s 2026 process calls for new transmission services for flexible large loads. |
| Use storage and demand response | Batteries can provide short-duration flexibility; demand response can lower or shift consumption when the grid is tight. The IEA says data-center power demand can swing rapidly as AI training and model use change, and storage could support the grid if incentives align. | Can help manage peaks or rapid changes, but duration, operating requirements and network limits matter. These tools complement rather than replace connection-capacity assessments. | Effectiveness depends on operating arrangements and incentives; storage or load response alone does not resolve every grid constraint. |
| Co-locate generation or use onsite supply | Pair a data center with generation, including behind-the-meter supply, or study generation serving an electrically proximate load. | May change how the project interacts with the grid, but does not automatically eliminate grid impacts or guarantee faster service. The IEA reports some US developers have advanced onsite natural-gas projects amid connection constraints, while design, supply-chain, regulatory and financing questions remain. | Grid reliability, how generation and load are studied, and responsibility for upgrades remain important. FERC’s 2026 actions address these arrangements rather than treating them as an automatic exemption from grid review. |
The IEA estimates that 1,200–1,600 GW of advanced-stage queued projects could potentially be enabled through non-firm connections and GETs. It labels this a high-level global estimate, not observed capacity brought online; actual results can differ after local studies. (IEA, 2026.)
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What US regulators are changing
FERC’s June 2026 orders
On June 18, 2026, FERC issued tailored show-cause orders to the six regional grid operators under its jurisdiction: PJM, MISO, SPP, CAISO, ISO New England and NYISO. The orders require each to justify its existing tariffs or propose changes addressing large-load study processes, cost transparency and prevention of cost shifting, co-location and behind-the-meter generation, transmission services for flexible large loads, and study of generation serving electrically proximate loads. FERC’s release set a 60-day period for tariff responses and a 30-day reporting requirement on generation adequacy. These are orders that initiate a tariff-response process, not a finalized universal tariff. (FERC, June 18, 2026.)
The earlier docket and the questions it raised
FERC docket RM26-4-000 followed an October 23, 2025 Department of Energy (DOE) direction to consider an advance notice of proposed rulemaking on large-load interconnection to the interstate transmission system. The docket generally describes a large load as demand above 20 megawatts (MW) and raises questions about whether flexible loads should receive faster studies, who should pay for upgrades, and how to review reliability when new loads are co-located with generation. These were questions under consideration in the docket; they are distinct from the later June 2026 orders. (FERC docket RM26-4-000.)
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DOE’s transmission-needs assessment
In July 2026, DOE released a draft National Transmission Needs Study for public comment. Based on public information and more than 120 recent reports, it assesses existing and near-term future transmission needs. DOE says the study identifies needs but does not select specific transmission solutions or replace existing planning processes. It reports that regional entities including MISO, SPP, PJM and ERCOT have approved some of their largest transmission portfolios, and that MISO approved the largest transmission portfolio undertaken in the United States in 2024. (DOE, National Transmission Needs Study.)
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More data-center demand can create pressure to invest in generation and grid infrastructure, but these sources do not establish a uniform effect on household bills or a final, universal rule for who pays. FERC’s focus on cost transparency and preventing cost shifting reflects an active policy question, not proof of a particular bill outcome. Likewise, a grid-connection queue or a national forecast cannot determine whether a specific project will affect local reliability; that requires analysis of its operating profile, the connection point and available network capacity.
For context, FERC reported that electricity demand across US regional organized markets grew 2.8% in 2024. That figure covers all demand in those markets, not data centers specifically, and should not be read as a data-center growth rate. (FERC, 2025.)
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