U.S. construction spending on power generation could roughly double to $150 billion a year by 2030, but equipment shortages, interconnection delays and skilled labor constraints could determine how much of that projected work actually gets built, according to a new construction market forecast.
MSI Economics, the research unit of construction services and technology company MOCA Systems Inc., projects nearly $691 billion in cumulative generation construction through 2030 in its new report, “Recharger America: The Construction Response to Rising Power Demand,” to be released Sept. 16.
The company says it built its forecast using North American Electric Reliability Corp. regional reliability data, U.S. Energy Information Administration capacity and cost benchmarks, GlobalData project monitoring and Lawrence Berkeley National Laboratory interconnection research, combined with its own capital cost model.
The report’s modeling incorporates about $1.66 trillion in announced data center and advanced manufacturing investment through 2030, including an estimated $1.25 trillion data center pipeline.
Sustained data center development is the biggest uncertainty in the forecast, MOCA Systems chief economist Brandon Michalski told ENR, although it is “the main driver of our electricity demand growth assumption.”
The team sets the pace in the short term
The report strives to dispel one of the biggest mirages of the data center construction boom — announced capacity doesn’t necessarily represent a construction-ready project — or one that’s likely to follow the developer’s schedule. Its modeling separates the main pipeline from the executable work through infrastructure testing and increasingly concrete capital commitments and approval of the transmission link at an advanced stage.
For projects expected to move forward in 2026 and 2027, the report requires four conditions: a clear or advanced grid interconnection queue position, an executed interconnection agreement, reserved transformers, turbines and switchgear, and committed financing. According to the report, none projects, especially equipment reserves, face 2028 or later.
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Applied to the pipe, the difference is substantial. Of the 12 GW to 16 GW of data center-related capacity projected for delivery by 2026, MSI estimates that only about 5 GW is currently under construction.
MOCA Systems Inc Recharging America The report examines how the development of U.S. power generation through 2030 is expected to drive construction demand.
Courtesy MOCA Systems
According to the report, lead times for high-power transformers have increased from a pre-2020 norm of 24 to 30 months to 128 weeks, while generator step-up transformers may require up to 144 weeks. Heavy frame gas turbines for combined cycle plants are quoted five to seven years from order to commercial operation.
“You can build the whole project and then put it at risk until those transformers, until the switching gears are available,” Michalski says.
MSI expects the equipment bottleneck to become more manageable starting in 2028 as manufacturers add production capacity, but Michalski says that assumption depends on announced factory investments materializing.
“What specifically changes then is the announced capital spending from the turbine manufacturers, from the expansion of appliance manufacturing,” he says. “The biggest risk from this is the failure to materialize the capital expenditures.”
Transformer manufacturing is also expanding, but its upstream supply chain remains concentrated. Grain-oriented electrical steel, a key transformer core material, has only one U.S. producer, according to federal records, while MSI estimates that imports provide about 80 percent of domestic demand.
Interconnection deadlines further shrink the short-term pipeline. MSI finds that projects coming into service from 2022 to 2025 spent an average of 46 months in the interconnection process in Texas and nearly 100 months in California. At these historical completion rates, many projects that entered the queues as recently as 2024 or 2025 would not reach service until later this decade or beyond, limiting their contribution to MSI’s near-term construction forecast.
Ken Simonson, chief economist for the Associated General Contractors of America, told ENR that he expects demand for additional power and upgrades or replacements for aging generation and transmission facilities to grow strongly over the next few years, but said he could not independently assess MSI’s spending forecast.
Limited production capacity is limiting natural gas turbines and custom transformers, Simonson said, with transformer production also affected by the limited supply of grain-oriented electrical steel. Beyond equipment, he cited “fierce competition for qualified electricians” among data centers, semiconductor manufacturing plants, liquefied natural gas facilities and power projects.
Associated Builders and Contractors chief economist Anirban Basu says demand for data center and power construction electricians is “particularly outsized relative to supply,” and average hourly earnings for electricians have risen 7.2% over the past year.
While the scale-up is relatively insignificant compared to the overall cost of a data center project, Basu said, it does represent “a serious headwind” for other industries competing to create AI for workers.
Where the wave of electrical construction lands
Texas state grid operator ERCOT, as well as large multistate operators PJM Interconnection and Midcontinent Independent System Operator account for about 87% of MSI’s implicit generation construction demand through 2030.
Texas dominates this growth. Peak demand is forecast to increase 46.8% through 2030, with MSI estimating $76.2 billion in generation construction tied to incremental demand in the region.
ERCOT shows the fastest projected peak demand growth through 2030, while PJM and MISO remain the largest regional power markets by peak load.
Chart courtesy of MSI Economics
Solar accounts for about 74% of MSI’s projected capacity additions through 2030. Natural gas is the only source of dispatchable generation the company sees adding capacity on a substantial scale, with annual gas construction spending reaching $29.4 billion by 2030. Nuclear provides little near-term volume.
As pressure to insure energy grows, a separate analysis published on September 15 by global insurance broker Howden points to the growing shift away from sole reliance on utility-supplied energy. Its inaugural data center risk report projects that “behind-the-meter” generation located at or near user locations could supply roughly 10 GW, or about 25% of U.S. hyperscale data center power by 2030.
An example is taking shape in southern New Mexico, where Oracle’s Project Jupiter AI data center campus is being built, with a planned on-site energy resource exceeding 2 GW. This year, the utility replaced a proposed gas turbine and diesel generator configuration with a Bloom Energy fuel cell microgrid behind the meter.
Oracle separately solicited proposals on Sept. 8 for 2 GW of new solar, wind, geothermal and other renewable generation in New Mexico, with projects slated for delivery between 2027 and 2031, as the tech giant seeks to match Jupiter’s electricity consumption with carbon-free generation by 2031.
MSI says data center and generation facilities are increasingly overlapping the same markets and build windows, leveraging the same workforce, transformer and substation capacity.
The gap between MSI’s EIA-based lower trajectory and its upper pipeline scenario is about 35 GW and $61 billion annually by 2030. Converting that potential into construction depends in part on building a materials data center, Michalski says, but the upper scenario also assumes nuclear development beyond the EIA baseline.
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Michalski says the upper scenario assumes “a takeoff in small modular nuclear reactors,” an assumption that is not part of the baselines of other models. MSI also allows for possible large-scale new nuclear construction.
MSI expects new turbine, transformer and switchgear capacity from 2028 to make the equipment bottleneck more manageable. However, that relief depends on manufacturers following through on promised investments and surviving enough projects to sustain the orders that prompted them, according to Michaelski.
Whether the deferred work turns into construction in the back half of the decade will determine how close the market is to MSI’s $150 billion forecast.
