TL;DR · 30-second read
The Short Version
America’s artificial intelligence boom may need far more electricity than power companies plan to supply. Bank of America analysts expect a shortfall by 2030 about equal to the output of 100 large nuclear reactors.
Some builders of giant computing centers may make their own power on site, often with natural gas engines. Some coal plants due to close are staying open.
The big unresolved question is who pays. The answer could shape what households and businesses see on their electric bills.
Utility Dive reported on July 17, 2026 that Bank of America analysts expect the United States to need more than 230 gigawatts (GW) of new generating capacity over the next five years, while regulated utilities add only about 93 GW of accredited supply, leaving a gap of more than 100 GW. Data centers alone could add roughly 125 GW of electric load, helping push electricity demand growth to a 4.1% compound annual rate from 2026 through 2030.
With large gas turbines largely sold out through 2030, the analysts expect data center developers to turn increasingly to on-site gas engines. They expect utilities to extend coal plant operations, deploy batteries and pursue transmission upgrades.
Executive Summary
BofA’s forecast puts a number on a problem the power and data center industries have been circling: planned utility additions cover only a minority of the capacity the analysts think the country will need by 2030. About 93 GW of accredited utility supply set against more than 230 GW of need is roughly 40% coverage.
The more useful part of the report concerns what happens next. More than 7.5 GW of data center projects with on-site generation are under construction and another 60 GW-plus are in pre-construction. Coal plants in seven states have had retirements delayed or canceled, and engine manufacturers have expanded production. Each of those responses carries its own costs, and utilities and regulators are still working out how to allocate the cost of new infrastructure.
That is why the planning question is changing. Utilities have raised their demand forecasts in each of the past three years, so attention is moving toward which assets can be delivered by 2030 and who will finance them. The forecast itself still depends on a fast AI hardware rollout, which is the main assumption to test.
Why the Debate Is Moving Past the Forecast
For years, the central argument in utility planning was whether projected data center demand would show up. BofA’s analysts take a firmer position. “The market is no longer constrained by demand — it is constrained by where power can actually be delivered,” they wrote. Their evidence is that utilities have revised demand forecasts upward in each of the past three years as AI-related load has arrived faster than expected.
The arithmetic explains the shift. Against a need of more than 230 GW, regulated utilities are expected to add about 93 GW of accredited supply, a shortfall the analysts put at more than 100 GW. Even if demand came in somewhat below the forecast, a gap of that size would still leave planners deciding which resources to build, extend or contract, and who should carry the cost. Data centers’ roughly 125 GW of added load is a bit over half of the 230 GW figure, although load and generating capacity are not identical measures. The requirement is therefore larger than data centers alone.
The demand question is not fully closed, however. The outlook rests largely on projections from BofA’s semiconductor analysts about how quickly AI chips and servers will be deployed. A slower hardware rollout would change the size of the gap, so the claim that demand is no longer the constraint is strongest as a description of the current market and depends on that rollout continuing.
On-Site Power Is Growing, but 7.5 GW Is Not 100 GW
The most visible response is behind-the-meter generation, meaning power plants built at the customer’s site rather than supplied solely through the utility grid. More than 7.5 GW of such data center projects are under construction, which is a small fraction of a gap exceeding 100 GW. Adding the 60 GW-plus in pre-construction brings the pipeline to more than 67.5 GW. That still falls short of the gap, and projects in pre-construction are not yet being built.
Equipment availability is shaping the technology choice. Large gas turbines remain the preferred source of flexible power, but manufacturing capacity is largely committed through 2030 and new units can take years to enter service after shipment. Reciprocating engines, which work on a similar principle to a very large car engine, can be deployed faster and respond quickly to changing loads. Caterpillar, INNIO, Rolls-Royce and Wärtsilä have expanded production, according to the analysts.
On-site generation does not take these projects off the grid. BofA expects facilities to pair self-generation with traditional grid connections to improve reliability and shorten timelines. Developers would therefore take on more of the power-plant work while still relying on utilities, which keeps questions about grid costs and connection terms open.
The Capacity on Paper May Overstate What Shows Up at Peak
The analysts also argue that planned additions may overstate available supply. A resource’s nameplate rating is its maximum output, while accredited capacity reflects what grid planners can count on during peak demand. Wind and solar typically earn less accreditation than their nameplate ratings suggest, so BofA concludes that firm resources, meaning those that can run on demand, will remain essential even as renewable generation expands.
That helps explain why existing plants have become part of the plan. The report identifies coal plants in Maryland, Wisconsin, Indiana, Utah, Kansas, Nebraska and Mississippi whose retirements were delayed or canceled to preserve dispatchable capacity. Batteries, transmission expansion and regulatory changes that make fuller use of existing generators could also help.
Transmission is the slowest of these options. BofA cites the Champlain Hudson Power Express, which took 16 years from planning to energization. That is one example rather than a typical schedule, but it shows why new lines may do little for a shortfall measured through 2030. It also gives weight to the analysts’ emphasis on where power can actually be delivered, since generation in one region does not help a site the grid cannot reach.
Who Pays Is the Harder Question
Prices are unlikely to close this gap on their own. Academic research cited in the report suggests a 10% increase in real electricity prices typically reduces consumption by 1% to 2% in the short to medium term. Set against forecast demand growth of 4.1% a year, that reduction is less than half of one year’s projected increase.
Limited price response puts more weight on cost allocation. Utilities and regulators are already addressing how to connect large new loads and divide the cost of new infrastructure. BofA notes that higher power prices could cause some demand destruction among customers and energy-intensive industries, so these decisions could reach well beyond the data center sector.
The likely mix of solutions also spreads costs differently. On-site engines place more of the build-out with developers, life extensions for existing plants run through utilities and their regulators, and transmission can involve many parties over many years. The choice of what gets built is therefore closely tied to who ends up paying for it.
Background
US electricity consumption grew little for about a decade as efficiency improvements, LED adoption and distributed solar generation offset new demand. AI infrastructure has changed that outlook, and utilities have raised their demand forecasts in each of the past three years. Because turbines, transmission lines and other grid assets can take years to deliver, faster load growth can quickly become a supply problem.
Regulators are responding as well. The Federal Energy Regulatory Commission has issued a decision on data center interconnection, the process of connecting a facility to the grid. In June, Texas, facing a 438 GW queue, approved an initial large-load interconnection process. These moves reflect the same issue at the center of BofA’s report: how large new customers connect to the system and on what terms. Source: AI data center growth could force US utilities to rethink generation plans, BofA says, Utility Dive’s July 17, 2026 brief on Bank of America’s forecast of a US electricity supply gap through 2030.Sources