America is building datacenters faster than the grid can power them

Moody's Financial Services warns that the United States is constructing datacenters at a rate that outpaces the nation's power grid's ability to expand. The AI boom and the need for greater computing power to train large models are primary drivers behind this construction surge. According to Moody's estimates, datacenters will consume 426 terawatt-hours (TWh) of electricity by 2030, nearly double the 2025 demand.

To address this growing demand, the power sector must develop new resources, which is projected to cost around $110 billion. This increase in costs will add approximately $25 billion to $30 billion annually to electricity system expenses. However, the process of building this extra generation capacity faces significant delays, with some projects taking up to seven years.

Transmission expansion also poses a bottleneck, with $80 billion to $115 billion already approved or under construction in US power markets. Some regions, like Texas, have seen accelerated development, but local grids are under pressure, leading to restrictions on new connections. Despite these challenges, Moody's remains optimistic that large-scale infrastructure investment will ultimately strengthen grid reliability and affordability, mitigating the risks associated with the datacenter boom.