30 31 Building and funding a 21st century grid Stakeholder decision-making regarding the siting of data centers will need to be accompanied by a recommitment to building the grid to enable an electrified AI economy to continue to grow. Though the makeup of domestic power generation varies in terms of mix, load factor, and deployment, the ability to efficiently and reliably transport electrons locally, regionally, and interregionally will be critical to limiting disruption and ensuring affordability. That variability also affects the distribution of finance needed across the energy-AI value chain, with incentives needed to build sufficient pools of capital in supply, generation, transmission, distribution, and data centers’ own infrastructure, without overweighting investment in one segment versus another. Future-proofing the domestic electricity grid, however, must acknowledge the age of its existing infrastructure. Specifically, the distribution transformer fleet is aging; approximately 55% of units in service are over 33 years old and approaching end-of-life, while the fleet’s distribution transformer capacity might need to triple by 2050 compared with 2021. This challenge is made only more acute by demand for transformers from data centers (which often require multiple transformer units to convert electricity across voltage levels) alongside the need for grid expansion to support overall capacity demand. This can also manifest as a risk to the security of deliverable electricity. A 2025 power station fire at London Heathrow Airport - which resulted in a widespread electricity outage - was caused by the failure of a 1968 transformer. Exhibit 19: The necessary holistic approach to building the infrastructure required across the energy, power and AI value chain, must account for the varying costs of moving molecules, electrons and photons. Equipment failures of natural gas infrastructure due to a lack of winterization highlight the vulnerability of critical energy systems to extreme cold — a key reliability challenge underscored during winter storms like Uri. Molecules ($$$$) Electrons ($$$) Photons ($) Energy Generation Transmission Demand Fiber optics Similar resilience measures need to be adopted to assure security of supply. While optimized data center placement might take advantage of regional natural gas resources, the utility of these local resources will only go so far if resilience is not considered early on. Texas’ experience during Winter Storm Uri in 2021 is one such example - when the available gas-fired generation declined significantly due to limited winterization, accelerating an electricity crisis in the absence of what was previously considered an uninterruptible baseload. Supply resilience is also critical as more renewables come online. Although Spain has experienced highly successful renewable energy integration, insufficient management of these interconnections may have contributed to the major power outage in May 2025 due to a combination of low-frequency oscillation and voltage fluctuation events. Finally, market connectivity can be a crucial way to ensure that competitive pricing for supply supports resilience and security, exemplified by Ukraine’s decision to resynchronize its grid with Europe’s grid frequency to disconnect its reliance on the Russian grid. Addressing the reliability risk of existing infrastructure can be complemented by wider transmission planning and development. In a high-growth scenario, capacity for regional and interregional transmission will need to grow by 128% and 412% (respectively) from 2020’s installed capacity, according to the US Department of Energy. 31 Key Takeaways: • Realizing AI and data center potential will require a modernized approach to the energy supply chain - one that addresses the age of the existing grid and prioritizes resilience. • Embracing a “build, build, build” approach to transmission infrastructure will be key. Interregional transmission can be a useful tool in ensuring electricity can be accessed reliably and economically throughout the country, regardless of where the demand resides. • Financing these efforts necessitates building pools of capital across the energy value chain to meet the $700 billion of investment needed annually to realize an AI-Energy economy in the US alone. Innovative investment models for finance will be particularly important. Exhibit 20: Data centers are projected to drive 19-25% of total US power sector investments — representing a major shift in energy planning priorities, with a minimum of $49 billion per year directed toward generation, transmission, and distribution to support compute demand. In order for each of these tools to be successful, and with data centers expected to drive 19-25% of all investment in the power sector, stakeholders will need to build new pools of capital to support the estimated $260 billion of annual investment required to build an energy system to support growth and enable AI. Funding a 21st century grid US Power Sector Investments (Billion USD, Annual Avg.) Generation Battery Storage Transmission Distribution Low High 239 264 2025-2030 2030-2050 2030-2050 303 450 60 61 2025-2030 2030-2050 2025-2030 64 79 47 20 118 42 18 115 Data Centers Investments (Billion USD, Annual Avg.) Power Sector Investments related to Data Centers (Billion USD, Annual Avg.) US Power Sector Investments (Billion USD, Annual Avg.) Generation Battery Storage Transmission Distribution Low High 239 264 2025-2030 2030-2050 2030-2050 303 450 2025-2030 2030-2050 2025-2030 64 79 47 20 118 42 18 115 Data Centers Investments (Billion USD, Annual Avg.) Power Sector Investments related to Data Centers (Billion USD, Annual Avg.) US Power Sector Investments (Billion USD, Annual Avg.) Generation Battery Storage Transmission Distribution Low High 239 264 2025-2030 2030-2050 2030-2050 303 450 60 61 2025-2030 2030-2050 2025-2030 64 79 47 20 118 42 18 115 Data Centers Investments (Billion USD, Annual Avg.) Exhibit 21: Annual US power sector investments supporting data center build-outs are projected to total over $230 billion through mid-century, with sustained spending across generation, transmission, storage, and distribution. While generation remains the largest category, to support a more flexible and resilient system, investments in grid infrastructure and battery storage must rise notably after 2030. US Power Sector Investments (Billion USD, Annual Avg.) Generation Battery Stora Transmission Distribution 239 264 2025-2030 2030-2050 64 79 47 20 118 42 18 115 Generation Battery Storage Transmission Distribution Low Hig 239 264 2025-2030 2030-2050 2030-2050 303 450 60 61 2025-2030 2030-2050 2025-2030 64 79 47 20 118 42 18 115 Data Centers Investments (Billion USD, Annual Avg.) Power Sector Investments related to Data Centers (Billion USD, Annual Avg.) US Power Sector Investments (Billion USD, Annual Avg.) US Power Sector Investments (Billion USD, Annual Avg.) Generation Battery Storage Transmission Distribution Low High 239 264 2025-2030 2030-2050 2030-2050 303 450 60 61 2030-2050 2025-2030 64 79 47 20 118 42 18 115 Data Centers Investments (Billion USD, Annual Avg.) Power Sector Investments related to Data Centers (Billion USD, Annual Avg.) US Power Sector Investments (Billion USD, Annual Avg.) Generation Battery Storage Transmission Distribution Low High 239 264 2025-2030 2030-2050 2030-2050 303 450 60 61 2025-2030 2030-2050 2025-2030 64 79 47 20 118 42 18 115 Data Centers Investments (Billion USD, Annual Avg.) Power Sector Investments related to Data Centers (Billion USD, Annual Avg.) US Power Sector Investments (Billion USD, Annual Avg.) Generation Battery Storage Transmission Distribution Low High 239 264 2025-2030 2030-2050 2030-2050 303 450 60 61 2025-2030 2030-2050 2025-2030 64 79 47 20 118 42 18 115 Data Centers Investments (Billion USD, Annual Avg.) Power Sector Investments related to Data Centers (Billion USD, Annual Avg.) 4.2 LONG-TERM BUILD-OUT At our current pace, we won’t have the transmission infrastructure needed for 2035 until 2235. Unattributed quote