Data center electricity demand could grow at a compound annual rate of 24% through 2030, according to McKinsey’s Global Energy Perspective 2026. The firm says that pace would make data centers one of the largest sources of new electricity demand anywhere in the economy, but it also warns that actual growth will be capped by how fast power infrastructure can be built, not by how much computing capacity operators want to deploy.
McKinsey partner Sam DeFabrizio told Data Center Knowledge that in nearly all of the firm’s likely scenarios through 2030, power supply lags behind IT compute demand. The model combines tracking of CPU and GPU purchase commitments and hyperscaler capital spending with real-world constraints on the supply side, including interconnection approvals, permitting delays, moratoriums, transformer lead times, and the availability of turbines, engines, and fuel cells. Construction and engineering capacity add further limits.
On-Site Power Comes With Its Own Bottlenecks
Facing slow utility timelines, many developers are turning to gas engines and turbines, fuel cells, and battery storage to get power online faster. But DeFabrizio cautioned that natural gas, often seen as the quickest route to firm capacity, runs into its own competition for pipeline infrastructure. Projects that need redundant pipeline connections for reliability face added complexity, and securing rights-of-way can be difficult within the short timelines operators want. Locating near gas-producing basins can ease that pressure. Battery storage helps with cost and flexibility, but McKinsey notes it introduces reliability trade-offs if it isn’t paired with actual generation.
Grid Ties Aren’t Going Away
Building on-site power doesn’t mean operators are abandoning the grid. More than 60% of operators now describe their strategy as a hybrid of on-site generation plus eventual grid connection, according to McKinsey. DeFabrizio expects many facilities to keep their on-site generation even after securing utility power, repurposing it as backup or flexible support that can also serve the broader grid. He also anticipates a more diverse supply mix beyond 2030, with growing demand potentially supporting expanded solar and wind paired with storage.
Uncertainty Builds Beyond 2030
The report’s central caution is for the period after 2030, when the demand pipeline becomes far less predictable. Efficiency gains in AI models, data center design, or workload flexibility could pull electricity demand below current projections, while faster construction and permitting could push power supply growth higher than expected.
McKinsey recommends developers tie capital deployment to clear market indicators, negotiate contractual protections with creditworthy customers, and keep a varied portfolio of power solutions rather than betting on a single approach. Community engagement should also factor into planning, the report says, alongside management of construction, contractual, and demand risk. DeFabrizio said the operators that come out ahead will be those who lock in scarce power early while managing risk carefully as the market evolves.