Wärtsilä: Why AI Data Centres in the US Face a Power Crunch

It is no surprise that electricity is one of the biggest constraints currently facing the data centre industry.

In fact, it could be the 'make-or-break' factor which defines what companies survive the AI boom.

According to Wärtsilä, a growing mismatch between construction and power availability risks becoming one of the biggest barriers to AI infrastructure growth across the Americas.

A hyperfocus on scaling fast could, therefore, be where data centre companies might go wrong.

The company describes the issue as "speed to powerless": where data centres can be built faster than they can be reliably powered, and argues that developers need to rethink how they plan energy infrastructure if they want projects to remain competitive in the years ahead.

Why grid delays are becoming a data centre challenge

Wärtsilä's report, Beyond the Grid: Building the Power System for AI in the Americas, examines data centre power constraints using data from Lawrence Berkeley National Laboratory, the International Energy Agency and national energy planning bodies.

Its findings point to mounting pressure across multiple markets.

In the US alone, around 2,600GW of generation and storage capacity was waiting for grid interconnection by the end of 2025, which created uncertainty for projects dependent on conventional connections.

Meanwhile, Brazil revised its projected data centre transmission load for 2030 upwards by 60% within just three months of publishing its national energy plan.

Risto Paldanius, VP Americas at Wärtsilä, says: "The race to build data centres across the Americas is extraordinary in its pace and scale. But power is not keeping up.

"Interconnection queues stretch years, transmission capacity is saturating in the corridors where data centres are clustering, and equipment lead times are pushing delivery towards 2030 and beyond.

"The risk is not that the market slows down – it is that it builds faster than it can reliably power.

"We call that speed to powerless, and the evidence suggests these pressures could converge into a serious constraint."

The report also highlights regional challenges beyond grid availability. In Mexico and parts of the US, water scarcity is an increasing concern, limiting the suitability of some power generation technologies because of their cooling requirements.

Rethinking data centre power architecture

Instead of relying solely on utility connections, Wärtsilä argues the industry should adopt a hybrid approach centred on large-scale on-site generation.

The company expects more developers to deploy what it describes as macro-grids: fully or partially isolated systems capable of supporting more than 100MW of on-site peak demand.

Unlike traditional microgrids, these systems are designed to operate independently while retaining the option of connecting to the wider electricity network when capacity becomes available.

Wärtsilä believes this approach could provide greater flexibility as AI campuses continue growing in size and power requirements.

Its research also compares reciprocating internal combustion engine (RICE) systems with aeroderivative gas turbines over a 20-year operating period.

Under the company's modelling assumptions, RICE technology delivers a 25% lower levelised cost of electricity – around US$86/MWh compared with US$111/MWh – representing estimated annual savings of approximately US$178m for a 1GW data centre.

Alongside cost, the research highlights operational resilience.

Wärtsilä says reciprocating engines maintain full rated output in temperatures ranging from –45°C to 45°C while requiring negligible process water for power generation, making them well suited to regions where both heat and water availability are growing concerns.

Risto says: "This is not a binary choice between on-site generation and the grid.

"The most resilient data centres will combine modular on-site RICE generation with flexibility, including grid supply where available, clean power contracts and long-term planning for eventual interconnection.

"The companies planning for that hybrid approach now will be the ones still operating efficiently in 2035, and the ones that are not planning for it risk finding themselves powerless at exactly the moment the market expects them to deliver."

Different markets, common pressures

While the report identifies common themes across the Americas, it also points to distinct regional issues shaping data centre investment.

In the US, transmission congestion, interconnection delays and permitting challenges are key obstacles, particularly in PJM and ERCOT, while California, Arizona and the Pacific Northwest are also expected to see continued growth.

Brazil faces transmission expansion timelines that may struggle to match demand, alongside policy developments including the proposed REDATA tax regime.

According to the report, developers in Mexico are exploring self-consumption models as grid expansion lags behind construction schedules.

Chile's focus has sharpened following a national blackout in February 2025, bringing greater attention to resilience and firm power capacity.

Meanwhile, Argentina offers attractive natural resources and investment incentives, although grid underinvestment and policy uncertainty continue to influence project planning.

Addressing these regional differences will require data centre developers to treat power planning as a long-term infrastructure, instead of a race to secure capacity as quickly as possible.