Data-center demand is holding up even as power and grid constraints slow new projects.
Why it matters: Data centers sit at the center of AI, cloud and power markets. When interconnection, permitting and financing become the bottleneck, project timelines can slip even if demand stays strong.
- CNBC reported Aug. 23, 2026 that the slowdown is being driven by bottlenecks rather than weaker demand.
- FERC has said data centers are large loads that need new interconnection and tariff rules.
- FERC's March 2026 state-of-the-market report said average project size rose from about 25 MW in 2020 to almost 80 MW for projects entering service in 2025.
- Reuters reported Aug. 10 and Aug. 4 that lenders and Texas regulators are treating power access, permits and community opposition as gating factors.
Data-center demand is still strong, but getting projects built is getting harder as power and grid constraints tighten. CNBC reported Aug. 23, 2026 that the slowdown is being driven by bottlenecks rather than weaker demand for compute.
Federal regulators have been pointing to the same issue. FERC has described data centers as large loads that need new interconnection and tariff rules because existing transmission processes were not built for this scale of demand. FERC said it is moving to speed large-load integration.
The commission's March 2026 state-of-the-market report said data-center projects are getting much larger, averaging about 25 MW in 2020 and almost 80 MW for projects entering service in 2025. The report also said these projects are increasingly seeking faster interconnection. The report links that growth to pressure on transmission systems.
Recent Reuters reporting points to the same bottlenecks in financing and approvals. One Reuters report said lenders are scrutinizing U.S. data-center financing more closely as community opposition, permitting and power availability can delay or stop projects. Lenders are seeing those delays as project risk. Another Reuters report said Texas Gov. Greg Abbott ordered a pause on new data-center approvals through the state grid interconnection process pending an audit. Texas is tightening its review process.
By the numbers
- 25 MW - Average project size in 2020, according to FERC's March 2026 state-of-the-market report.
- Almost 80 MW - Average project size for data-center projects entering service in 2025, according to the same report.
Yes, but: The demand story is still intact, but that does not mean every announced project will get built on schedule. Power access, interconnection and permitting can still delay or reshape projects.
What's next: FERC's large-load integration efforts and Texas' grid interconnection review are the near-term policy developments to watch.