This month’s Horizons explores how surging demand from data centres is reshaping the US power market - and what’s at stake for utilities, regulators and grid reliability.
The US power sector is facing an inflection point. A wave of new data centre developments - totalling 140 GW of proposed capacity - is colliding with the limitations of today’s electricity market model. The implications span the entire value chain, from utilities and generators to regulators and investors.
Regulated utilities are structurally better positioned to integrate these large loads, thanks to their vertical integration and land ownership. But this comes with new risks, including customer concentration and a fundamentally different credit and cost recovery dynamic. Meanwhile, deregulated markets are struggling to respond. Their inability to attract new supply and maintain reliability could spur backlash from states looking to reclaim control over energy planning and development.
Despite growing interest in off-grid or behind-the-meter solutions, these remain uncommon and fraught with challenges - from operational complexity to difficult contracting terms. And while policy responses are likely, there’s a high risk of regulatory missteps with wide-ranging effects on prices and asset valuations.
This month’s Horizons report, US power struggle: How data centre demand is challenging the electricity market model, lays out the potential scenarios and consequences as the energy system tries to adapt to this rapid load growth.
Key themes include:
- Utility advantage - and risk: Regulated utilities are better equipped to respond, but face new exposure from highly concentrated customer bases.
- Deregulated market stress: Competitive markets are faltering under the pressure of large new loads, raising concerns about reliability and long-term planning.
- Off-grid ambition vs. reality: Despite growing interest in non-traditional configurations, most off-grid supply remains impractical at scale.
- Policy uncertainty: A regulatory response is likely - but missteps could create lasting distortions in market outcomes and asset performance.
As the AI and data boom accelerates, the power sector will need to act quickly and strategically to ensure it can keep pace - without undermining reliability, affordability or investment.
Read the full report now to get the complete picture. Then, join us for Horizons Live, where our expert panel will debate some of the key themes and answer your questions in a live Q&A.
Our panel:
- Simon Flowers, Chairman, Chief Analyst and author of The Edge
- Chris Seiple, Vice Chairman, Energy Transition and Power & Renewables
- Ben Hertz-Shargel, Global Head of Grid Edge
Register now via the form at the top of the page.
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