BREAKING THROUGH 2026’S POWER INFRASTRUCTURE BOTTLENECKS
A View on 2026’s Power ChallengesÂ
Data center developers are racing to support AI-driven growth, but a number of challenges persist. Grid constraints, long lead times for critical equipment, and a limited supply of large gas turbines are pushing many to explore unconventional solutions. We’ve seen strategies ranging from sourcing equipment on secondary markets to repurposing aircraft engines and even evaluating retired naval reactors to meet immediate capacity needs.
But this urgency is drawing in a mix of players. Some have the financial strength and long-term commitment to deliver real value. Others are purely opportunistic—pursuing short-term gains without a sustainable execution strategy. This makes it more important than ever to evaluate partners carefully and ensure alignment on delivery, capability, and risk tolerance.
In this article, we’ll discuss the evolving challenges in data center construction—grid access delays, commissioning bottlenecks, equipment shortages—and share how developers are adapting through on-site generation, flexible EPCM models, and strategic capital planning.
2026 Outlook: Demand Surge and Power Infrastructure Strain
Data centers are expanding faster than ever, and those supporting AI applications are pushing power infrastructure to its limits. We face a perfect storm where skyrocketing needs clash with severe supply limitations.
AI and Electrification Driving 26% Peak Load GrowthÂ
The digital world is changing at an incredible pace. Five-year load growth forecasts have jumped more than sixfold, from 24 GW to 166 GW. Data centers account for about 55% of this projected need. Total electricity use will likely surge by 32% by 2030, with a 5.7% growth rate expected over the next five years.
AI’s explosive growth leads this surge. The U.S. Department of Energy expects data center electricity use to almost triple by 2028. It could jump from 176 TWh in 2023 (4.4% of total U.S. electricity) to between 325-580 TWh (6.7-12% of U.S. electricity). AI workloads might take up half of all data center capacity by 2030, compared to about 25% today.
Grid Interconnection Queues: 2 TW of Capacity DelayedÂ
Getting grid connections has become a major problem. Some regions have wait times of up to seven years, and the average grid connection lead time in key markets exceeds four years. Grid Strategies reports that builders added fewer than 900 miles of new high-voltage transmission last year—nowhere near the 5,000 miles the US grid needs annually.
The backlog of interconnection requests has reached crisis levels. Renewables and storage make up 95% of queued projects. This gap between faster growing demand and static grid capacity pushes many developers to look for other options, such as on-site power generation.
Limited Availability of Gas Turbines and Long Lead TimesÂ
Supply chain issues make these challenges worse by creating longer wait times for essential power equipment. You’ll wait 72-104+ weeks for generators, 52-78 weeks for transformers, 48-60 weeks for chillers, and 30-40 weeks for UPS systems.
Equipment lead times worldwide now average 33 weeks—50% longer than before 2020. Even though developers order materials up to 24 months early, more than half of data center projects in 2025 faced delays of three months or longer.
These limitations spark new ideas. Some developers look at secondary markets for equipment and repurpose aircraft engines or naval reactors to meet urgent power needs.
Others implement behind-the-meter solutions. Gas turbines prove practical because of their high-power density, reliability, and efficiency in data center applications.
Grid Access and Interconnection as the New Bottleneck
Grid interconnection has become a major bottleneck in data center development. Operators now welcome new solutions as traditional utility connections face delays like never before.Â
Conditional Interconnection Rules in PJM and ERCOTÂ
Regional transmission organizations have created new frameworks to handle the surge in large load requests. PJM received directions from FERC to set up clear rules for co-located data centers. The organization now has to develop three new transmission service options that include interim non-firm service and demand-based contracts. These changes will fix PJM’s “unjust and unreasonable” tariff that didn’t give interconnection customers enough clarity.
ERCOT has rolled out its Large Load Interconnection Process to systematically handle loads above 75 MW. The process has detailed reliability studies, verification of ride-through capabilities, and strict commissioning requirements. The grid operator’s conditional interconnection rules now ask large loads to stick to approved commissioning plans with specific demand limits. This shows how ERCOT tries to keep reliability and growth in balance.
On-Site Generation and Battery Storage RequirementsÂ
Behind-the-meter generation has become crucial as grid constraints continue. About 13% of facilities now use some type of on-site generation. This number will jump to 38% by 2030, with 27% of facilities running fully on on-site solutions. The growth is massive – it’s 27 times more than last year’s mere 1%.
Natural gas turbines, reciprocating engines, and fuel cells are common on-site power options. Each brings its own benefits in efficiency, emissions, and speed of deployment.
Battery Energy Storage Systems (BESS) have gained popularity as both primary and backup power sources. Modern lithium-ion systems can run for 2-4 hours with high energy density. They boost reliability, help avoid demand charges, and make better use of renewable energy.
Secondary Market Equipment Sourcing: Aircraft Engines and Naval ReactorsÂ
Due to extended equipment lead times across the industry, data center developers are increasingly sourcing aeroderivative gas turbines from nontraditional supply channels. These aircraft-derivative engines offer a significantly accelerated delivery timeline compared to the typical 3–5 year wait for new OEM units. Their rapid deployment potential is becoming a key factor in meeting the high power density and uptime requirements of hyperscale and mission-critical facilities. A Texas company has proposed an even bolder move – reusing U.S. Navy nuclear reactors from decommissioned vessels. These naval reactors could generate 450-520 MW of power at 50-80% lower cost than new civilian nuclear facilities. The secondary market for IT equipment is booming too. Refurbished servers usually cost 50-80% less than new ones.
Flexible Construction Models and Capital Strategy Shifts
Data center developers face unprecedented resource constraints and capital requirements, and construction models are changing faster than ever. The high-pressure environment demands adaptable approaches to project delivery and financing.
EPCM vs EPC: Managing Work Packages Under Resource ConstraintsÂ
EPC contractors have reached their capacity limits with full order books. Developers now lean toward Engineering, Procurement, and Construction Management (EPCM) models. EPCM lets activities run in parallel instead of sequence. Teams can progress with design work on certain portions while they implement stand-alone work packages or order early materials.
Traditional EPC contracts make contractors take full risk. EPCM works as an extension of the developer’s team that adapts to specific needs. This adaptability proves especially valuable when:
• Owners need more control over critical decisions
• Teams have enough in-house expertise to manage complex interfaces
• Contractors emphasize engineering over construction
• Projects receive owner funding through balance sheets
Commissioning and Skilled Labor as Execution Risks
Data center construction in 2026 faces major risks from skilled workforce shortages and commissioning complexity, beyond the usual power and capital limitations.
Labor Force Ramp-Up Strategy for Mission-Critical ConstructionÂ
The construction boom has made workforce logistics a major bottleneck. MEP installation phases need 1,000-3,000 skilled workers at peak times. Poor site access and movement can lead to missed targets and delayed milestones. Smart contractors now model crew movements during preconstruction, like in material flow or construction phasing planning.
Systems Integration Management Across Hybrid InfrastructureÂ
Modern data centers are complex because they combine public cloud, private data centers, and edge deployments. This hybrid approach creates challenges in technology integration, costs, and performance tracking. Successful projects need experts who can handle compatibility problems, manage security compliance across environments, and build flexible systems that adapt to changing needs.
Conclusion
The data center construction industry is entering a new era—one where success is increasingly defined by the ability to navigate complexity with speed, precision, and foresight. The convergence of AI-driven load growth, equipment lead time volatility, and grid interconnection bottlenecks has forced developers to rethink conventional approaches. Behind-the-meter generation, modular infrastructure, and secondary market procurement are no longer stopgaps—they are now central strategies.
At the same time, project delivery models are evolving. As EPC contractors reach capacity and skilled labor becomes more constrained, developers are shifting toward EPCM frameworks and specialized commissioning packages to maintain control and progress. These adaptations are not simply reactive—they represent a broader transformation in how capital projects are scoped, staffed, and executed under pressure.
What’s clear is that organizations can no longer afford to treat infrastructure as a linear process. Success in 2026 and beyond will belong to those who bring integrated thinking to fragmented challenges—those who understand that reliable power, fast execution, and sustainable project delivery are all connected.
At NAES, we’ve spent decades supporting clients across the full lifecycle of energy infrastructure—from project planning and project management through commissioning, operations, and compliance. We understand what it takes to deliver under pressure, because we’ve done it time and again.
If you’re planning, building, or operating critical power infrastructure, and need a partner who can move at the speed of today’s demand—start with NAES.
