Global electricity demand is rising at its fastest pace in 15 years, and natural gas is set to supply more than half of the new U.S. power generation needed to meet it. But grid capacity, not fuel supply, is emerging as the bottleneck, with the IEA estimating annual grid investment must rise 50% from today's roughly $400 billion by 2030.
Gas carries the US power buildout
Wood Mackenzie forecasts 3.2% annual U.S. electricity sales growth through 2035, two-thirds of it from data centers. Gas remains the fuel of choice for that growth and will meet 52% of the increased power generation through 2035, backed by the Trump administration's energy policy.
Yet gas investment costs have hit a record high, and bottlenecks in gas turbine deliveries are complicating utilities' decisions to lean further on gas-fired capacity. The U.S. Energy Information Administration said data center load is emerging as the dominant driver of long-term U.S. electricity growth, and the West South Central region alone will account for nearly 20% of nationwide sales growth in 2026 and almost 40% in 2027.
Wood Mackenzie's power and renewables analysts warned that the need for electrons must be balanced against the risk of stranded assets, noting that state policy responses to the demand surge remain fragmented.
Grids become the global chokepoint
Beyond the U.S., the pattern repeats. Europe's power demand is climbing too, pushed by decarbonization policy and a drive toward renewables as the bloc guards against disrupted Qatari LNG flows and Hormuz shipping risk. Asia-Pacific will see the largest growth of any region, driven by industrialization and urbanization in China, India and Southeast Asia, and is set to account for nearly three-quarters of global demand growth through 2035.
The International Energy Agency says global power demand will grow more than 3.5% a year on average through the end of the decade. "A lack of grid capacity is emerging as a critical bottleneck in many regions", the agency said in its Electricity 2026 report, adding that grid connection queues have reached record levels worldwide.
That leaves grid expansion, rather than generation capacity, as the limiting factor on how fast gas-fired power can actually reach the grid.
Source: Oilprice.com
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