Goldman Sachs Alerts: US Power Grids Could Experience Shortages by 2030

US Power Grids Face Capacity Shortages Amid Rising Data Center Demand

According to a Goldman Sachs analyst, nearly every power grid in the United States is expected to experience significant capacity shortages by 2030, as the growing energy needs of data centers put increasing pressure on the system. These constraints could potentially give China an advantage in the rapidly evolving field of artificial intelligence.

Samantha Dart, who serves as co-head of global commodities research at Goldman Sachs, warned that if these issues are not resolved, China may surpass the US in the AI sector. She shared these insights during the Goldman Sachs Energy, CleanTech and Utilities Conference held in Miami.

Challenges in Expanding Grid Capacity

Dart explained that the US is not expanding its power generation capabilities quickly enough. Power grids generally aim for a reserve margin of at least 15%—the difference between peak energy demand and the available supply from sources like coal, natural gas, nuclear, and renewables. Some regions are already below this threshold, and the gap is expected to widen as data center growth accelerates demand throughout the decade.

The US power infrastructure consists of a complex network of regional grids and thousands of smaller utilities. After two decades of minimal growth, the country is now struggling to boost investment in its energy infrastructure.

Regulatory and Economic Hurdles

Although the previous administration prioritized the AI race, maintaining a competitive edge will depend on whether regulators can streamline approval processes, modernize outdated market regulations, and upgrade aging infrastructure. At the same time, rising energy costs are becoming a significant political and economic concern, especially as data centers contribute to increasing utility bills already strained by grid maintenance and recovery from extreme weather events.

Impact on Consumers and Politics

Carly Davenport, head of US power and utilities equity research at Goldman Sachs, noted that higher utility bills are likely to be a major topic in the upcoming gubernatorial elections in 36 states. Over the past two years, average utility costs in the US have risen by about 9%. Some areas, such as New York City and Maryland, have seen increases of around 20%, while states like Florida and New Hampshire have experienced declines.

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