How are bottlenecks in the energy development pipeline reshaping the US market?

Grid congestion, equipment shortages and stalled permits have made achieving speed to power increasingly challenging. Buyers are paying a premium for it and the advantage is shifting to developers with scale and execution capability, creating consolidation opportunities.

Electricity demand growth by sector and end use in the United States, 2015 – 2030

Total incremental electricity demand over each five-year period (TWh)

Source: IEA 2026; Electricity demand growth by sector and end-use in the United States, 2015-2030, https://www.iea.org/, License: CC BY 4.0.

Energy demand is soaring, with 420 TWh of incremental electricity demand forecast to be added in the US over the next five years, as shown above.¹ This is driven by a combination of diversified demand sources including the electrification of transport and industry, heating and cooling and data centre requirements.

Developers are racing to respond, but the development pipeline is clogged by:

• Interconnection queues: the waiting lists for grid connection grew 116 per cent between 2020 and 2025.²

• Equipment bottlenecks: lead times for generator step-up transformers, which link new generation to the grid, have reached 144 weeks.³

• Permitting delays: more than 125 wind projects across 25 states are awaiting approval.⁴

Speed to market is now driving what gets built. Rapid growth in power demand is outpacing available supply, a challenge compounded by stalled wind approvals in the US. Against this backdrop, developers are increasingly prioritising technologies that can connect fastest. Solar and storage lead on deployment speed and storage is emerging as a way to unlock grid capacity directly. At Aligned Data Centers’ Hillsboro campus, an on-site battery system developed by Calibrant, a Macquarie Asset Management portfolio company, supports earlier energisation than would be possible through conventional grid upgrades that would otherwise have been required to connect the site.

It is also shaping prices. As demand outpaces available grid capacity, data centres, for example, are paying more for power that can be connected sooner. In PJM North Illinois, the US’ most congested data centre market, corporate Power Purchase Agreements (PPAs) are pricing $US38 per megawatt-hour (MWh) above the 2027–2041 forward curve. In ERCOT West Hub, where supply connects faster, they sit $US14 per MWh below it.⁵

In other words, the harder it is to connect, the higher the premium available supply commands.

Why does it matter?

The bottlenecks are changing who can compete.

Holding queue positions, reserving equipment years ahead and financing longer development timelines require balance-sheet strength and specialist teams. In our view, this complexity can push smaller platforms out, while larger developers can spread risk, absorb delays and raise capital more cheaply.

We believe the next phase of energy delivery is an execution race that sophisticated, scaled players are positioned to lead, driving further consolidation across the sector.