The bull market for power equipment is 'still in its early to mid-stage,' according to JPMorgan: U.S. grid modernization has yet to begin, and Chinese enterprises hold potential to break into the U.S. market.

Data centers will trigger a 100 GW new capacity gap. Global electricity consumption growth is accelerating, with AI data centers (DCs) at the core of this trend. JPMorgan’s U.S. team forecasts that, solely to meet data center power demand, the U.S. will require approximately 100 GW of new generation capacity by 2028. Globally, data center installed power capacity is projected to grow from 117 GW in 2023 to about 242 GW in 2028—a compound annual growth rate (CAGR) of 27%. Yet the supply side remains stagnant. Net additions to U.S. baseload power (gas/nuclear) will remain flat through 2029, causing reserve margins—the buffer between available supply and peak demand—to tighten sharply in key regions such as ERCOT (Texas) and PJM (Eastern Interconnection), where margins in some areas have already fallen to around 20% or lower. This supply-demand imbalance is pushing up electricity prices: forward power prices for 2026 in PJM’s western and eastern zones have risen roughly 15% year-to-date. The U.S. grid is 'extremely fragile': interconnection queues stretch up to seven years; transmission infrastructure development lags severely. The explosive growth of data centers is colliding head-on with America’s aging grid. Grid constraints are making data center interconnection timelines increasingly desperate: in Virginia, wait times exceed seven years; in certain parts of Texas, they may reach eleven years. This bottleneck stems from severe underinvestment in U.S. transmission networks over the past decade. Data shows that average annual new high-voltage transmission line construction in the U.S. fell to under 700 miles in 2023–2024—down sharply from 4,000 miles per year in 2013. To meet reliability targets, the U.S. needs to build 5,000 miles annually going forward. JPMorgan notes that current demand for high-voltage power equipment is still driven primarily by renewable energy interconnection (accounting for over 70% of demand), while the true 'grid modernization/replacement cycle' has not yet fully begun. Over one-third of U.S. grid equipment is already more than 30 years old—but replacement demand accounts for only 20–25% of total current demand. This implies that once aging infrastructure replacement accelerates in the coming years, equipment shortages will intensify further. Supply chain 'tightness' has become the norm: capacity expansion is constrained, and prices remain persistently high. Despite surging demand, supply-side capacity expansion remains unusually 'disciplined.' Delivery lead times for large power transformers (LPTs) have stretched to 2–3 years; switchgear exceeds 1–2 years; and gas turbines require 3–4 years. Major manufacturers (e.g., Hyundai Electric) have announced capacity expansion plans, but progress is slow due to shortages of skilled labor and raw material constraints. JPMorgan estimates that newly added LPT manufacturing capacity in the U.S. can meet only about 20–30% of annual demand growth. This structural supply-demand imbalance supports exceptionally strong pricing power for equipment manufacturers over the next several years—with product prices having risen over 60% since 2021 and showing no signs of easing.

Global grid modernization requires $5.8 trillion, with the U.S. accounting for $1 trillion.

Wires running underground in U.S. cities—and strung between utility poles nationwide—have an average age of nearly 60 years. JPMorgan, America’s largest bank, views this as an issue demanding close attention across the entire economy. According to a report released by JPMorgan on March 25, the aging U.S. grid poses a 'national security risk,' warning that the vulnerability of these decades-old infrastructures is increasingly exposed to threats including extreme weather, cyberattacks, and geopolitical tensions. This warning comes alongside a forecast offering investment rationale: JPMorgan projects that global grid modernization spending will total $5.8 trillion between 2026 and 2035, with the U.S. accounting for approximately $1 trillion of that amount. Why is JPMorgan sounding the alarm on grid fragility? Most of the U.S. grid was built in the 1960s and 1970s—many sections approaching 60 years of age. Assets from that era require maintenance and replacement, while external threats—including climate change, cyberattacks, and geopolitical conflict—are imposing unprecedented stress on infrastructure originally designed decades ago. Grid resilience efforts are not merely defensive infrastructure maintenance—they increasingly underpin economic development, industrial competitiveness, and national security. The timing of this warning is no coincidence. Global electricity demand is expected to grow at a compound annual growth rate (CAGR) of 3.6% between 2026 and 2030—roughly 50% faster than the prior decade. AI data centers alone are projected to drive 465 terawatt-hours (TWh) of additional demand over the next five years—about 9% of total global demand growth. AI data center demand highlights the grid crisis. The report underscores a growing mismatch between the scale of AI companies’ planned projects and the grid’s actual ability to support them. The U.S. Department of Energy forecasts that AI data centers may require an additional 100 GW of peak capacity by 2030. This pressure is already evident. It is reported that U.S. data center new project announcements in Q4 2025 declined by half—partly because the grid is nearing its limits. The largest grid developers expect capital expenditures in 2026 to decline for the first time since 2023, falling to $94 billion—a 58% drop from 2025. Reliability concerns extend beyond Wall Street analysts. Mark Christie, Director of the Energy Law Center at William & Mary Law School, offered a succinct summary: 'We’re heading toward a reliability crisis—not one on the horizon, but one right across the street.' How large is the grid investment opportunity? JPMorgan’s report presents a striking set of figures. Global grid spending rose from $300 billion in 2020 to $480 billion in 2025.

JPMorgan Discusses US Grid Risks 'Every Chance' It Gets

Sep 23, 2026

JPMorgan Chase plans to prioritize US grid modernization financing during New York Climate Week, citing electricity demand surges from data centers and EVs. The bank partners with RMI to address grid bottlenecks deemed a national security risk.

bloomberg

JPMorgan Discusses US Grid Risks 'Every Chance' It Gets

FAQ