U.S. Data Center Power Costs Have Surged
A new industry analysis finds that ballooning demand for electricity is forcing buyers to lock in higher rates.
Updated on Sept. 28, 2026 in Data Centers
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Noreva has released an analysis of 132 U.S. power transactions totaling $36 billion, highlighting a market shift driven by accelerating data center demand. The report reveals that power procurement prices have risen significantly as competition for available energy supply intensifies.
Why it matters
The rapid expansion of AI and cloud infrastructure is straining grid capacity, forcing a reassessment of long-term energy planning. This price escalation reflects the fundamental competition between data center growth and existing generation constraints.
Renewable power purchase agreements (PPAs) averaged $58.68 per MWh, while natural gas PPAs reached an average of $115.87 per MWh. These costs are set against a backdrop where only 25% of announced generation projects are currently tracking to hit their scheduled completion dates.
The players
Noreva
A research entity providing proprietary data and methodology for assessing energy market transactions and project feasibility.
The details
Noreva used proprietary market data and transaction methodology to evaluate 132 U.S. power agreements. The process involved cross-referencing announced data center project load requirements with the maturity pipeline of power generation assets, which currently average five years in development. This analysis exposes a capacity gap where demand is growing faster than the verifiable construction of new energy supply.
Timeline
2025: Data center power demand reached 104 gigawatts.
2026: The industry analysis was published and demand hit 132 gigawatts.
Year-end 2026: Contracting and project financing are expected to continue.
2030: Projected data center power demand is 290 gigawatts.
The Tech Race
This report provides a quantitative baseline for the broader challenge of grid interconnection delays facing major hyperscalers. It marks a significant departure from historical energy procurement patterns, confirming that power availability—rather than just compute capacity—is the primary bottleneck.
Businesses and researchers relying on scalable cloud capacity may see these higher energy costs reflected in future service pricing models. Because average power projects take five years to develop, these energy constraints and associated costs are likely to persist throughout the remainder of the decade.
The takeaway
Data center demand is projected to more than double to 290 gigawatts by 2030, suggesting that energy procurement will remain a volatile sector. Watch for updates on the 75% of announced projects not currently on schedule to see if capacity expansion catches up with demand.
What happens next
Market participants should monitor project financing and contracting volume updates through year-end 2026 to see if the current pricing environment stabilizes or continues to escalate.
Further reading
For more context on the infrastructure supporting current trends, browse the Data Centers section.
More information
Download the Full power deals report download for the complete dataset.
Source note: This article includes information reported by Tedmag.
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