“Data‑center demand is reshaping investment across the US wire and cable supply chain"
This is the second installment of a quarterly editorial series authored by CRU, a globally recognized authority in metals, materials and value chain analysis. The first edition outlined CRU's top market calls for 2026 across the wire and cable industry. This issue takes a closer look at the US market, examining how explosive data center growth is straining grid infrastructure — and what this means for aluminum conductor demand, cable supply chains, and manufacturing investment.
US utility market plays catch-up to data center load growth
Developers scramble for interconnection leading to double counting of projects by utilities
In 2025, Pacific Gas and Electric Company (PG&E) was forced to revise downward its forecast data center pipeline by roughly 400 MW; equivalent to 25 data centers or 250,000 homes. This write-down was due to the double, triple and sometimes quadruple counting of data centers, as developers seek to hedge their bets due to lengthy and uncertain electricity interconnection queues. Similarly, AEP Ohio cut its list of pending projects by 30%, removing data center developers with only speculative financial strength from its queue.
Interconnection challenges have emerged as one of the most significant risks to the pace of data-center expansion. Google's Head of Sustainability and Climate Policy, Marsden Hanna, stated that "Transmission barriers are the number one challenge we're seeing on the grid", and, "We have utilities in many markets telling us four or five, sometimes ten years to interconnect". Currently, it takes on average seven years for project interconnection in the US.
Challenges with interconnection have already stunted data center rollout in other countries such as Ireland where the application accounts for roughly 22% of the country's electricity consumption, more than all residential use in the country. This figure has risen by 531% since 2015. As a consequence, in 2021 Ireland introduced a temporary moratorium on new data center rollouts until new legislation was passed in December 2025; now any data center seeking a grid connection must install on-site generation or battery systems capable of meeting its full electricity demand with 80% coming from renewable energy. Operators will also be required to provide power back to the national grid when needed.
US ratepayers’ electricity bills are up by as much as 16% YoY in data center heavy states
The current system of US ratepayers footing much of the bill for data centers has had ramifications on average electricity prices which rose by 7% on average from October 2024 to October 2025, even more in states with high data center loads such as Illinois which rose by 16% YoY.
Electricity prices are already a politically sensitive issue in the US, with residential tariffs rising meaningfully since 2021. Against that backdrop, hyperscale data centers which are often highly visible, water-intensive, and tax-advantaged have become focus areas for public concern. The core fear is that utilities will be forced to overbuild generation, substations, and transmission to serve uncertain large loads, with the costs spread across all customers. Several utilities and regulators have explicitly acknowledged this risk, prompting new tariff structures that require large loads to underwrite upgrades or commit to minimum take-or-pay volumes, sometimes as high as 85% of contracted demand.
The US Department of Energy now forecasts 20 GW of incremental data-center load by 2030 and estimates that data centers could account for 6.7% to 12% of total US electricity consumption by 2028, up from 4.4% in 2023. For a three-year horizon, that range is extraordinarily wide and highlights the scale of uncertainty utilities are being asked to plan against. The main question is who will take on the costs associated with planning for this uncertainty.
Total U.S. data center electricity use from 2014 through 2028
DATA: 2024 United States Data Center Energy Usage Report, Lawrence Berkeley National Laboratory
ERCOT introduces new, stricter, interconnection criteria
With the scale of the challenge against the historically slow-moving grid institutions, changes are being implemented at a policy level to try and get power generation and interconnection planning up to speed. At the federal level, proposals have emerged to accelerate permitting and explore new procurement mechanisms that force large loads to "pay their way". PJM, under direction from federal regulators, is developing new frameworks for connecting large loads that bring their own generation, accept curtailment risk, or rely on flexible interconnection arrangements rather than firm capacity.
In Texas, ERCOT (Electric Reliability Council of Texas) serves 90% of the state. This independent system operator is responsible for managing the grid reliability, generation and power pricing. In early 2026, ERCOT announced "Batch Zero", a new planning system for large load interconnection. With this, developers with loads over 75 MW will face stricter eligibility criteria and maturity requirements, ensuring projects are prioritized effectively and delays are reduced. It also will prioritize projects that bring their own generation – a move being seen across global energy markets.
Gas turbine demand has spiked as data centers try to circumvent the grid
Alongside regulatory reform, data-center operators are increasingly turning to technical solutions that reduce reliance on traditional grid expansion. One approach is co-location with power generation, allowing data centers to connect "behind the meter" and limit their net withdrawals from the grid. Another is the expanded use of on-site generation including gas turbines originally designed for aviation to bridge multi-year interconnection delays. The demand for gas turbines has risen dramatically with average wait times of five years at present, and has also fueled a substantial secondary market. Going forward, nuclear small modular reactors could provide an optimal solution though regulation renders them unfeasible for now.
Aluminum overhead cable demand has risen by roughly 9% CAGR from 2020-2026
CRU has written previously on the demand for wire and cable within data center campuses themselves. Here we attempt to understand the changing demand to the wider electricity grid which, in the US, is mainly comprised of aluminum overhead conductors in the form of ACSS (Aluminum Conductor Steel Supported) and ACSR (Aluminum Conductor Steel Reinforced). Historically, a large portion of the aluminum overhead conductors used in the United States have been imported. This percentage share of imports rose to a record high of 68% in 2023 when challenges with domestic US production prompted utilities to look overseas to fulfill their grid obligations. Since then, production has normalized while demand for aluminum overhead lines has risen by an average of 9% CAGR between 2020 and 2026 rising from 107 kt conductors used to 166 kt conductors, respectively. CRU understand that roughly half of cable procurement is used for ongoing maintenance and reconductoring with the other half being used for new transmission and distribution projects.
DATA: CRU Wire and Cable Market Outlook
Expansion of aluminum conductor production from existing players is likely as demand grows and tariffs take effect
The rapid expansion of data-center demand is reshaping not only utility planning but also the structure and urgency of investment across the US wire and cable supply chain. As interconnection delays lengthen and regulators tighten eligibility criteria, "bring your own power" solutions and greater on-site generation will increasingly become the norm for hyperscalers driving demand for behind the meter power including wind, solar and battery storage solutions.
At the same time, Section 232 tariffs on steel and aluminum will benefit the investment attractiveness for US-based aluminum overhead line production which has been neglected in recent years due to lower margins compared to high voltage insulated cable products and EPC projects. CRU expects that this convergence of structural load growth, policy intervention, and shifting procurement strategies will spur further cable manufacturing capacity additions and localization efforts among US producers.
About the author
Aisling Hubert, Lead, Wire & Cable Services, Chicago
Aisling Hubert leads CRU’s Wire & Cable Services and edits the Wire & Cable Market Outlook and Electricity Transmission Market Outlook. She specializes in analyzing global wire and cable markets, with a focus on metal demand driven by electrification, energy transition, and infrastructure development. Before joining CRU, she worked in the platinum group metals (PGM) sector, focusing on ESG performance and hydrogen supply chains. She also has field experience as an exploration geologist in East Africa. Aisling holds an MSci in Geology from the University of Southampton and is a member of Women in Mining UK.
CRU’s Wire and Cable team has delivered authoritative market analysis and client support for decades, supported by specialists located in major global hubs such as London, Chicago, Pittsburgh, Beijing, Shanghai, and New Delhi. Their experts are available for direct consultation on emerging trends and market developments.
For further information, visit CRU Wire and Cable.
