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The grid connection and equipment bottleneck

· 7 min read · grid, equipment, lead-times, transformers

Why plugging a new data center into the grid can take years, from interconnection queues to transformer lead times, and what is being done about it.

You can buy land and pour concrete fairly quickly. The slow part of building a large data center is often everything between the power plant and the building: the grid connection and the heavy electrical equipment. This post explains the two queues builders now wait in, and what regulators and manufacturers are doing.

Queue one: getting connected to the grid

Before anything big can connect to the grid, the grid operator studies whether the lines and substations can handle it. Projects wait their turn in an interconnection queue, a waiting list for those studies and the upgrades that follow. Think of it as a waiting list at a busy doctor's office, where every new patient can change the treatment plan for the ones behind them.

Lawrence Berkeley National Laboratory tracks the queue for new power plants and batteries each year in a report called Queued Up. Its 2026 edition, covering data through the end of 2025, found (Lawrence Berkeley National Laboratory, May 2026):

  • About 8,200 projects were waiting, totaling 1,312 gigawatts of generation and roughly 749 gigawatts of storage.
  • Total queue volume fell 10% from the year before, because many projects withdrew and fewer new ones applied.
  • Natural gas in the queue rose 86% to 253 gigawatts, while solar, wind and storage fell.
  • For regions with data, the median time from asking to connect to starting operation was more than five years for projects completed in 2025.
  • Of the capacity that applied between 2000 and 2020, only 13% was ever built. About 75% withdrew.

This queue is for power plants, not data centers. But it matters to data centers because new demand needs new supply, and that supply is stuck in the same line.

The rules for big new users are changing

Large electricity users, such as data centers, connect through a related process run by utilities and regional grid operators. On June 18, 2026, the Federal Energy Regulatory Commission (FERC), which oversees the US interstate grid, issued six orders to the grid operators PJM, MISO, SPP, CAISO, ISO New England and NYISO. It found that their rules for connecting large loads appeared inadequate and asked each to respond, rather than writing one national rule. The orders cover faster study processes, protecting other customers from cost shifts, generation built right next to a data center, new service options for loads that can flex their use, and studies for power plants serving nearby large loads (Utility Dive, June 2026). Utility Dive reported that responses were due within 60 days, with the option to ask for an extension.

Queue two: the equipment

Even with a grid connection approved, you need the hardware. The biggest bottleneck is the power transformer, a large machine that changes electricity from one voltage to another, like a phone charger the size of a house. Data centers also need switchgear (the heavy-duty switches and breakers that route power and cut it off safely), backup UPS systems and batteries, and generators.

The research firm Wood Mackenzie reported that average transformer lead times rose from about 50 weeks in 2021 to about 120 weeks in 2024, with large substation and generator step-up units ranging from 80 to 210 weeks. It also estimated that only about 20% of US transformer demand could be met by domestic supply (Wood Mackenzie, April 2024).

More recent figures, reported by POWER magazine in January 2026 from Wood Mackenzie data (POWER, January 2026):

  • Average lead time in the second quarter of 2025 was 128 weeks for power transformers and 144 weeks for generator step-up transformers. That is roughly two and a half years.
  • Switchgear averaged 44 weeks.
  • Wood Mackenzie modeled a 30% supply shortfall for power transformers in 2025, and 10% for smaller distribution transformers.
  • Power transformer prices had risen 77% since 2019.

What builders and suppliers are doing

More factories. POWER tallied nearly $2 billion in committed North American transformer manufacturing capacity since 2023. Examples include a Hitachi Energy plant in South Boston, Virginia, and a Siemens Energy plant in Charlotte, North Carolina, due to start production in early 2027 (POWER, January 2026).

Power on site. FERC's June orders specifically address generation located right next to a data center and loads that can reduce use when the grid is stressed (Utility Dive, June 2026). Both are ways to connect sooner without waiting for every grid upgrade.

Choosing sites carefully. A site where the grid already has room to spare avoids waiting on new lines and substations that a weaker spot would need.

Why this matters

With lead times measured in years, the timeline of a large AI project can be set less by the chips than by the transformer and the grid connection. Planning those first, and ordering the slowest items early, is how a builder keeps the rest of the schedule from waiting on them.

Try it in NodalZen

Site helps you compare US locations for a grid connection, and Source lists the equipment your plan needs with typical lead times for transformers, switchgear, UPS, batteries and generators. Simulations shows how a delay ripples through the schedule.

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