Power

Sections: Powering Development Growing importance in site selection Energy landscape Key considerations Addressing energy constraints

Power

Sections: Powering Development Growing importance in site selection Energy landscape Key considerations Addressing energy constraints

Powering development

Mission critical and strategic sectors require uninterrupted, high-reliability power due to their impact on economic stability, national security and essential services.

Power is a critical enabler for mission critical and strategic sectors, such as data centers, semiconductor manufacturing, battery and EV production, and bio-pharma manufacturing. In 2024, data centers consumed an estimated 415 TWh of electricity—around 1.5% of global electricity demand.¹ By 2030, Goldman Sachs expects AI adoption to push that demand up by 160%. The semiconductor industry consumed 149TWh of electricity in 2021, and this is projected to increase by nearly 60% to 237 TWh by 2030.²

Data centers

Key drivers of high-power consumption

Hyperscale cloud, colocation, AI and high-performance computer workloads
24/7 uptime, high redundancy needs
Cooling, backup power and storage requirements

Semiconductor manufacturing

Key drivers of high-power consumption

Clean room air filtration and conditioning
High-powered tools, e.g. for lithography, etching, and deposition
Miniaturisation/reduction of node sizes

EV battery manufacturing

Key drivers of high-power consumption

Clean and dry room requirements
Electrode coating and drying
Cell formation

Pharmaceutical and life sciences

Key drivers of high-power consumption

Cleanroom and HVAC for R&D and production
Cold storage and precision manufacturing
Continuous power for vaccine and drug production

David Brown Vice President - Americas

Utility companies across North America are expanding their capital plans to address urgent grid modernization needs and meet rising power demand.

Growing importance in site selection

In the current landscape, energy has become more than just a utility - it is a strategic consideration in site selection and a critical factor in enabling future development, particularly for mission critical sectors.

Historically, site selection has focused on connectivity, real estate costs and proximity to a skilled workforce and end users. Now, power availability, reliability, and sustainability have emerged as key drivers, transforming power into a strategic differentiator. In the data center sector, power influences operational resilience and downtime prevention and long-term sustainability. An Uptime Institute survey found that 52% of respondents indicated that major outages were due to power disruptions, underscoring the need for reliable power infrastructure.⁵

The growing need for energy-intensive technologies, such as AI, high-performance computing and advanced manufacturing, presents a quandary to organizations that want to grow and innovate, while simultaneously lowering their energy usage to achieve their Environmental, Social, and Governance (ESG) objectives. As a result, there is a strong emphasis on securing sustainable and low-carbon energy solutions. However, navigating this transition is complex, as each region faces distinct challenges related to energy supply, grid quality and infrastructure.

When assessing power source feasibility for site selection, key factors include the energy mix and power generation landscape of the country, grid availability, capacity and reliability, as well as proximity to substations and transmission lines to reduce infrastructure costs. Access to renewable energy—via Power Purchase Agreements (PPAs) or green tariffs—is crucial for meeting sustainability goals, along with evaluating energy costs, carbon intensity and regulatory conditions. It's also important to consider alternative backup power options, scalability of infrastructure and utility lead times, to ensure timely and efficient deployment.

Energy landscape

Energy supply, production and electricity generation trends

Both the United States and Canada have committed to achieving net-zero emissions by 2050 identifying the power sector as a key component of their climate action plans.⁶ In January 2025, the US administration signed an executive order to withdraw from the Paris Agreement, emphasizing the importance of domestic energy production. Previously, the US aimed for a carbon-free electricity grid by 2035, concentrating on the transition from fossil fuels to renewable energy sources and incorporating technologies such as small modular reactors (SMRs) and carbon capture systems. The administration is now promoting increased energy production from a variety of sources, including oil, natural gas, coal, hydropower, geothermal energy, biofuels, critical minerals, and nuclear energy.⁷

Canada, already sourcing over 80% of its electricity from non-emitting sources, is focused on decarbonizing fossil-heavy provinces and expanding clean capacity to support electrification.⁸

For both countries, achieving the right energy mix is essential for creating a reliable, resilient and low-carbon grid that supports the growing demands of mission critical sectors. This is particularly important given the changing weather patterns across the US, which increasingly affect energy reliability and infrastructure resilience. However, the US withdrawal from the Paris Agreement could impact the country's energy transition.

North America’s energy landscape is undergoing a significant transformation, marked by rising domestic production and evolving electricity generation sources. Utility companies are expanding their capital plans to address urgent grid modernization needs. While there is a clear push towards cleaner energy, fossil fuels continue to dominate the market, and policy uncertainties present challenges.

From 2010 to 2023, energy production surged by 39% in the United States and 42% in Canada, outpacing supply and indicating a move towards greater energy independence. Although the US became a net energy exporter in 2019, fossil fuels still account for a large portion of energy imports, with crude oil representing 66% of the total as of 2023. As part of the total energy supply, coal usage has significantly decreased—by 67% in Canada and 57% in the US—but this decline has been offset by a notable increase in natural gas use, which rose by 54% in Canada and 37% in the US.⁹ ¹⁰

The electricity generation mix has shown notable changes over the years. From 2010 to 2023, the share of non-fossil fuel sources in US electricity generation rose from 30% to 40%, while Canada increased from 77% to 81%. Coal's share has steadily declined, with natural gas now contributing 42% of US generation and 14% in Canada. Hydropower and nuclear remain dominant in Canada, supplying 73% of total electricity in 2023. According to Ember, wind and solar generated a record 17% of US electricity in 2024, surpassing coal's 15% share for the first time. Solar surged by 64 TWh, outpacing even gas, which grew by 59 TWh.¹¹

US electricity demand is expected to rise by 35–50% between 2024 and 2040, driven by data centers, advanced manufacturing, and the electrification of transportation and heating, particularly in the Eastern Interconnection regions (PJM, MISO, Southeast) and Texas (ERCOT).¹¹ ¹² To meet this growing demand, efforts are underway to increase generation capacity. The US Energy Information Administration (EIA) projects electricity generation will grow by 2% this year and 1% in 2026, with most of that growth coming from renewables. Natural gas generation is expected to decline by 3% this year and 1% in 2026, marking a slow shift away from fossil fuels.⁹ The National Energy Dominance Council was established in February 2025 to promote domestic energy production. However, a funding freeze on certain programs under the Inflation Reduction Act might hinder progress in the clean energy sector.

Regional variations

The US electric grid consists of three largely independent regional systems, connected only by limited transmission links, primarily located in sparsely-populated central regions.

Regional grid systems:

The Eastern Interconnection, which covers states east of the Rocky Mountains.
The Western Interconnection, which covers the Pacific Ocean to the Rocky Mountain states.
The Texas Interconnected system (Electric Reliability Council of Texas (ERCOT)).

Despite a decentralized grid structure within the regions, interstate electricity trade has remained relatively steady—though change is on the horizon. In 2023, only seven states imported more than 20% of their power, most with a below-average contribution of renewable power. On the flip side, states rich in wind and solar used less imported electricity, in part due to better battery storage.¹¹

There is a clear transition towards clean energy, with California and Nevada crossing a major milestone in 2024, having solar account for over 30% of their annual electricity mix. In states like Kansas, Iowa and New Mexico, wind and solar have become the leading sources of power. Meanwhile, in parts of the Southeast and Mid-Atlantic, coal is being phased out primarily through increased gas adoption, with several states still below 10% renewables.¹¹

Key considerations

Aging grids

According to a Deloitte survey, limitations in grid infrastructure have been identified as a primary barrier to delivering reliable power to data centers.¹³ North America’s grid is aging and under pressure. In the US, over half of the grid infrastructure is more than 20 years old, with 70% of transmission lines nearing the end of their life cycle.¹⁴ Canada faces similar challenges, with much of its grid built over 50 years ago, posing challenges to accommodate modern demand or renewable integration.¹⁵ However, over the past few years, power infrastructure investment has accelerated, with investment in power grids and storage almost doubling—from US$67 bn in 2017 to US$124 bn in 2024. The Department of Energy is backing 58 grid modernization projects across 44 states with US$3.5bn, unlocking over US$8bn in public-private investments.¹⁴ Canada is also stepping up, committing US$362m to drive grid upgrades, boost renewables, and strengthen resilience for future energy needs.¹⁶

Capacity bottlenecks and transmission gaps

As demand accelerates, driven by urbanization, data centers, electrification and AI, the grid is struggling to keep pace. Transmission capacity is lagging significantly. To meet the projected demand, the US must expand its grid by up to 57% by 2035, but current progress is slow.¹⁷ In 2024, 275.5 miles of high-voltage lines were added, a considerable increase from 2023’s 59.5 miles of high-voltage lines, but still insufficient given grid needs nationally.¹⁸ Interconnection queues are ballooning, with renewable projects representing 95% of the backlog.¹⁹

US utility companies are ramping up investment to meet soaring power demand. According to S&P Global, CAPEX across 47 major energy utilities is projected to exceed US$212bn in 2025—a 22% increase from 2024. From 2025 to 2029, total utility capital spending is expected to surpass US$1tn.⁹

The ongoing interconnection delays are hitting mature data center markets the hardest. In response, operators are exploring microgrids - self-contained power systems using renewable energy or small modular reactors (SMRs). These systems generate power on-site and deliver it directly to the data center, bypassing the main grid altogether.

In a recent move, Berkshire Hathaway Energy (BHE) US Transmission announced a 420-mile high-voltage direct current (HVDC) line that will link the Eastern and Western grids through North Dakota and Montana.²⁰ At the same time, Grid United is advancing a suite of HVDC transmission projects designed to strengthen national grid reliability by connecting the country’s largely independent power networks.²¹

Geopolitical risk impacting supply chain and grid interdependence

The North American grid is a patchwork of regional systems—lacking full synchronicity and limited in transfer capability. This makes it harder to balance supply and demand across large geographies, especially as renewables increase variability. Canada’s hydro-rich provinces like Québec, Manitoba and British Columbia, have long exported electricity to the US, balancing supply and creating revenue. However, this interdependence also creates strategic risk. Shifting US policies and tariffs could disrupt this historically beneficial trade. At the same time, supply chain pressures are slowing grid modernization. Rising steel costs, driven by global tariffs, are further inflating the cost of upgrading.¹⁹

Addressing energy constraints

Corporate Power Purchase Agreements (CPPAs)

These are long-term agreements between corporate buyers and energy producers for direct purchase of electricity. This energy is predominantly sourced from renewables such as wind, solar or hydro, aligning with sustainability goals and supporting cleaner energy transitions. CPPAs have emerged as a critical mechanism for securing clean energy in the United States, particularly in response to the growing power demands of hyperscale data centers. In 2024, corporate procurement in North America reached 18GW, reflecting an 18% YoY increase, with solar accounting for more than half of the contracted capacity.²² Data center operators, including leading hyperscalers, remain the primary corporate buyers. Notably, nuclear energy- particularly small modular reactors—is gaining traction as a long-term solution to meet 24/7 clean power requirements.

The Canadian CPPA market, while in its early stages, is on an upward trajectory, with data centers acting as a linchpin. Hyperscalers and regional operators are leveraging Canada’s renewable resources, including hydro, wind and solar, while exploring nuclear and hydrogen innovations. Alberta leads adoption, but Ontario and Quebec hold untapped potential as data center hubs grow. Over the next few years, Alberta producers could add about 900 megawatts (MW) of wind and solar capacity driven by corporate PPAs.²³

For mission critical sectors, selecting the right CPPA is pivotal in balancing sustainability goals with operational efficiency. Factors like energy price volatility, renewable generation sources and grid infrastructure constraints must be thoroughly analyzed. Long-term contract durations, often spanning 5–20 years, should align with both sustainability strategies and energy procurement plans.

Disclaimer

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Power

Power

Powering development

Mission critical and strategic sectors require uninterrupted, high-reliability power due to their impact on economic stability, national security and essential services.

Data centers

Key drivers of high-power consumption

Semiconductor manufacturing

Key drivers of high-power consumption

EV battery manufacturing

Key drivers of high-power consumption

Pharmaceutical and life sciences

Key drivers of high-power consumption

David Brown Vice President - Americas

Growing importance in site selection

In the current landscape, energy has become more than just a utility - it is a strategic consideration in site selection and a critical factor in enabling future development, particularly for mission critical sectors.

Energy landscape

Energy supply, production and electricity generation trends

Regional variations

Key considerations

Aging grids

Capacity bottlenecks and transmission gaps

US utility companies are ramping up investment to meet soaring power demand. According to S&P Global, CAPEX across 47 major energy utilities is projected to exceed US$212bn in 2025—a 22% increase from 2024. From 2025 to 2029, total utility capital spending is expected to surpass US$1tn.⁹

Geopolitical risk impacting supply chain and grid interdependence

Addressing energy constraints

Corporate Power Purchase Agreements (CPPAs)

Other alternative energy solutions and key considerations

Disclaimer