The US could face an electricity generation shortfall of 100 gigawatts between 2026 and 2030, Bank of America said on Wednesday, driven in part by booming chip production and demand as well as US utilities' inability to meet the moment.
Between 2026 and 2030, capacity demand is expected to reach 230 gigawatts or more, per Bank of America analysts led by Andrew Obin. On the utilities side, however, the bank only sees 93 gigawatts of supply coming.
"While demand is accelerating, deliverability-not forecast load-is the binding constraint, increasingly capping realized growth across regions," BofA analysts wrote in a prior note. "The market is no longer constrained by demand — it is constrained by where power can actually be delivered."
For more than a decade, the demand for power across the US has been nearly stagnant, growing by less than 1% per year. But as the data center buildout has boomed to power the AI revolution, US electricity demand has exploded and is projected to grow five times faster over the next 10 years than it did in the previous decade, according to research from Bank of America. And these companies are showing no signs of slowing down. The problem, experts told Yahoo Finance, is that the data centers "want power right away," not in five to 10 years, said Rob Gramlich, president of electricity infrastructure consulting firm Grid Strategies.
On the grid, the process for turning power demand into power generation takes years. When a utility receives a power load request, such as from a tech company looking for, say, 2 gigawatts for a new data center, the utility spends millions buying the equipment, materials, and hiring the personnel to make it happen.
The gap between demand and generation is likely to be increasingly filled by on-site power — for example, by installing natural gas turbines alongside a data center — and by battery storage. That's set to be a boon for natural gas turbine makers such as GE Vernova (GEV), Eaton (ETN), and Emerson (EMR), the BofA analysts said.
But there's a wrinkle: Natural gas turbines are essentially sold out through 2030, and the process to get a delivered turbine connected and generating electricity is likely to take two years past delivery.
That's pushing some data center developers toward another generation source: gas reciprocating engines, produced by companies like Rolls Royce (RYCEY), INNIO Group (INNA.PVT), and Caterpillar (CAT) — all poised to also do well in this electricity boom, per BofA.
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.
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