Bank of America Sees 100 GW US Power Gap as Data Centers Drive Behind-the-Meter Gas Push
Utilities are forecast to cover less than half the generation needed over five years, accelerating hyperscaler demand for on-site gas turbines and distributed equipment.
Bank of America analysts warned on Thursday (2026-07-17) that the United States faces a generating capacity shortfall exceeding 100 gigawatts over the next five years, as data center buildout accelerates well beyond what regulated utilities can deliver. Utilities are expected to add only around 93 GW of accredited supply against a forecast need of more than 230 GW, leaving a gap the analysts said will force data center operators to increasingly source power outside the grid.8
The shortfall has direct implications for gas demand. It is pushing hyperscalers toward behind-the-meter generation — gas turbines, reciprocating engines and on-site battery storage — rather than waiting years for grid-connected capacity. Manufacturers including Caterpillar, INNIO, Rolls-Royce and Wärtsilä have already expanded production to meet rising demand for distributed power equipment, the BofA analysts noted.8
The scale of incoming demand is visible in forecasts published in May. The Electric Power Research Institute projected as of 2026-05-19 that data centers could consume between 9% and 17% of U.S. electricity supply by 2030 — up to 790 terawatt-hours, compared with roughly 4% at the time of publication. BloombergNEF's 2026 New Energy Outlook, published on 2026-05-31, put the longer-horizon figure more starkly: global data center power demand will double by 2050, with the AI build-out keeping fossil fuels in the generation mix for longer than transition scenarios had assumed.2,71
BofA's supply estimate also rests on an accounting problem in planned capacity additions. Intermittent resources — wind and solar — contribute less accredited capacity during peak demand than their nameplate ratings imply, which means a grid that adds 100 GW of solar on paper may deliver materially less firm power when temperatures spike and data halls run hardest. The planned additions, the analysts said, overstate available supply for precisely this reason.8
Battery storage has grown quickly but not quickly enough to bridge that gap alone. The U.S. added a record 57.6 gigawatt-hours of new battery capacity in 2025, according to the Solar Energy Industries Association, bringing the deployed total to 166.1 GWh, and annual deployments are projected to reach 110 GWh by 2030. Lengthy interconnection queues and a supply chain heavily weighted toward China are constraining how fast storage can scale, with high battery pack prices and shipping bottlenecks adding further drag.2,3
European developers face a different version of the same squeeze. Power purchase agreement volumes for data centers fell from 4.2 GW in 2024 to 2.6 GW in 2025, even as physical capacity buildout accelerated, according to data cited by OilPrice.com on Monday (2026-05-25). Offshore wind delays and declining renewable capture rates have made PPA pricing harder to agree, with developers unwilling to lock in at levels that work for buyers who need firm, schedulable power.5
The pattern repeats in Asia. A "significant reordering" of the Asia-Pacific data center market is under way, with hyperscalers placing greater weight on scalability and delivery certainty, according to a market analysis published on 2026-05-26. Upcoming pipeline projects in the region are frequently measured in the hundreds of megawatts, with some approaching gigawatt-scale campuses — demand concentrations that outpace grid infrastructure in markets where transmission buildout lags power plant construction. Southeast Asia alone could see 100 terawatt-hours of incremental data center, EV and industrial power demand by 2030, a Bain and Standard Chartered study found, but grid bottlenecks risk slowing delivery.6,4
The sequence driving all of this is consistent across regions. Hyperscalers need power now; grid-connected clean capacity arrives in years; gas-fired behind-the-meter solutions can be permitted and installed faster. NYMEX Henry Hub front-month traded at $2.84 per MMBtu as of Monday (2026-07-20), down 0.70% on the session — a price level that makes distributed gas generation economically competitive against the cost of delaying AI infrastructure deployment.1
BofA expects the behind-the-meter shift to accelerate because grid interconnection queues in most U.S. markets are measured in years, not months. Whether federal regulators move to clear those queues, or the distributed generation wave simply absorbs the capacity shortfall without them, will set the trajectory for U.S. gas demand through the end of the decade. The answer will also determine how much of the transition's planned clean capacity ends up supplementing gas rather than replacing it.8