Data Centers Project to Pump $65B into Electrical Equipment Market Despite Challenges, Analysis Reveals

The growing demand for electrical equipment surrounding data centers is driving up the U.S. market, according to a recently released analysis that has captured the dramatic rise. Wood Mackenzie, a global analytics and research consulting firm within the energy industry, says that the electrical equipment market is projected to surge from $20 billion to $65 billion by 2030.

 

In an emailed release to T&D World, WoodMac states that data centers are expected to capture 40% of that projected outlook, a rise from just under 2% in 2020. In addition to the financial impacts, U.S. data center capacity is expected to increase over that four-year period, from 24 GW to 110 GW, accounting for 68% of total load growth. That’s reportedly eight times more electricity (400,000 GWh) that would be consumed than the amount of electricity consumed by EV vehicles over the same time period.

 

The firm adds that such a demand for electrical power would represent one of the most concentrated surges in modern history. Equipment bottlenecks are also being impacted, with projected lead times being extended by 18-36 months, and price increases by 20% as a result.

 

Roughly 600 gigawatt (GW) of projects are reportedly still searching for power capacity along the pipeline, according to WoodMac. This is compared to just 183 GW that have signed construction or electricity supply agreements with U.S. utilities.

 

Researchers believe these proposed projects and initiatives for data centers underscore the critical need for strategic planning that focuses on grid capacity and sustainability.

Whether by way of moderated demand (95 GW by 2030) or demand that’s accelerated by behind-the-meter generation (BTM) and prefabricated modular construction (roughly 95 GW by 2030), WoodMac says datacenters still present unprecedented challenges.

 

"Data centers are fundamentally different from any load the electrical equipment industry has supported before," WoodMac senior analyst Ben Boucher said in a statement. "This is a structural shift that will define the next decade of the electrical equipment market."

 

Boucher says that manufacturers will face critical decisions relating to the supply chain. They could invest significant capital to meet projected capacity demands, but this may constrain supply in the process, which would slow the entire buildout of AI infrastructure. 

 

As an alternative, manufacturers have the choice to lower data center expectations overall, but risk losing market share in a potential $65 billion market by 2030.

 

"We're already seeing manufacturers return to customers with year-old purchase orders to impose 20% price increases just to maintain delivery schedules,” Boucher added. “Hyperscalers are willing to pay these premiums because missing a launch window risks massive revenue losses.”

 

WoodMac states production for padmount transformers is projected to grow from 1,573 units in 2025 to 9,395 by 2030. Panel boards are projected to expand from 5,111 units to over 30,000 in the same timeframe, among other switching and protection equipment that faces similar pressure.