Datacenters are outgrowing the US grid, and the workarounds are slow

The power demand from US datacenters is growing about ten times faster than the grid's capacity to supply it, according to new analysis from Howden, an insurance broker 1

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. That gap is driving operators to look beyond the grid, as Howden frames it.

Why the gap exists

The mismatch predates the AI boom. Since 2000, power fed to US datacenters has risen 19% a year on average 1

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. Grid capacity expanded only 2% annually, per Howden's analysis of US Energy Information Administration and S&P Global data 1

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. Datacenters accounted for about 5% of US grid capacity in 2025, up from 0.1% in 2000 1

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Howden frames the work as an assessment of how developers can secure electricity as AI infrastructure demand accelerates 1

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. By its estimate, datacenters would need up to 58% of their power from off-grid sources by 2030 merely to hold their current share of grid demand steady 1

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. Howden warns that grid connection waits of two to six years could leave the largest projects $800 million to $2.4 billion short of revenue 1

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"As demand for AI infrastructure accelerates, developers are increasingly looking beyond traditional grid connections to secure the electricity they need," said Stuart Adam, Howden's head of Natural Resources 1

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The workarounds, and their costs

Per TechRadar, Anthropic is investing $3.4 billion in on-site gas turbine generators 2

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. Per the same outlet, that reliance leaves the company exposed to natural gas prices, which have spiked amid Middle East conflict and shifting consumption from other industries 2

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. Nearby residents have complained too: turbine noise has been compared to an international airport, and a low hum has been linked to unexplained illnesses, per TechRadar's reporting 2

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Nuclear is the other path. Per TechRadar, three reactors in Michigan, Pennsylvania and Iowa are set to share $4.4 billion in federal grants for recommissioning, with Microsoft and Google first in line for the power 2

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. Amazon is looking to buy more than 960 MW from 12 planned small modular reactors in Iowa, at a cost likely exceeding $1 billion 2

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. The sites are not yet approved and may not run until the mid-2030s 2

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. Per TechRadar, the US has approved the first small nuclear reactor plan built specifically for a data center, in Tennessee, with each modular reactor providing up to 300 MW 2

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. None of the nuclear routes is quick or cheap, since recommissioning or building reactors takes billions to meet safety requirements and expected operating lifetimes 2

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How alarmed should anyone be

Gartner warned in June that AI datacenter energy use is on track to grow 26% this year 1

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. It questioned whether grid supply can keep pace by the end of the decade 1

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. The charts behind the alarm use different scales, 1,400 GW for the grid against 80 GW for datacenters, so datacenters are not about to swallow the US electricity system 1

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. Households may feel it regardless. Per experts cited by TechRadar, power costs in some states could climb as much as 50% by 2030, and grid expansion is typically paid for through household bills 2

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. Howden, whose business is insurance, also flags that on-site generation leaves operators carrying new operational and financial exposures 1

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Howden estimates that holding datacenters at 5% of grid capacity would take about 110 GW of behind-the-meter capacity by 2030, an expansion it considers unlikely 1

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. It expects a mix instead: more grid reliance, slower building at power-short sites, and alternative supplies sharing the load 1

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. "Power availability is becoming one of the defining challenges of the datacenter boom," said Stuart Adam, Howden's head of Natural Resources 1

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