Labour, equipment and local opposition are slowing US data center projects
Victoria Shinder1 min readThe US data center boom has entered a contradictory phase, Utility Dive reports. Construction activity and credible near-term forecasts for grid capacity to serve data centers remain strong: the Electric Power Research Institute said in February that data centers will account for up to 17% of US electricity demand in 2030 and as much as 20% in 2035.
At the same time, projects face physical constraints, including shortages of skilled labour and equipment, and growing public opposition over water use, the cost and reliability of power and gas supplies, and quality of life in host communities. The result, the article says, is that even projects advanced enough to appear in utility load forecasts with a named hyperscaler attached are not certain to go ahead.
The examples are specific. Near Grand Rapids, Michigan, a Microsoft data center promoted by Consumers Energy faces an uncertain future because of local permitting delays. Another Microsoft-backed site in Vineland, New Jersey, was fined $1 million for running dozens of gas-powered generators without the proper permits and ordered to obtain them within 45 days or shut down. A photo caption in the piece cites a Goldman Sachs forecast that only 50% to 60% of planned data center capacity will come online in the next two years because of delays and cancellations.
Why it matters
Utilities are planning generation and transmission against these load forecasts, and ratepayers can end up paying for capacity built for projects that never arrive. The gap between announced and delivered data centers is now the key uncertainty in US demand planning, and it is being decided locally, by permits and supply chains, rather than by the headline investment figures.