The Hyperscaler Challenge: A Holistic Grid Opportunity

Are hyperscalers a grid solution, a strain, or both? That is the question I asked an energized, highly engaged audience this week at World Energy Week in Panama City. Taking a deep-dive into one of the fastest-emerging drivers of global energy demand, we explored how hyperscalers, power developers and regulators can align to turn exponential load growth into a catalyst for innovation and decarbonization. 

Now I invite you to join our conversation. How do you view the hyperscaler dilemma? Grid problem or grid solution? At World Energy Week, audience consensus saw it as both a strain and a solution – a pragmatic view of hard work at hand. I see it as the grid paradigm-shift opportunity of our lifetime.  

And I say this not just as an optimist; engineers are wired to view challenges as opportunities. While discussions underscored how the “AI as clean-energy accelerator” narrative needs some reckoning, and how major hyperscalers’ emissions are up despite 24/7 carbon-free goals, our panel and audience demonstrated that we have what it takes to collaboratively scale solutions that meet demand and drive successful energy transitions. Panelists shared this optimism despite challenges, citing the opportunity for investment at scale. And these are the early days of those investments.

Speed-to-Power Catalyzing Innovative Models and Partnerships

World Energy Week is a dynamic space to share actionable solutions that will enable faster, fairer, and further-reaching energy transitions. Our panel session, “Wiser and Smarter Power Shifts: AI & Hyperscalers,” focused on the explosive growth of AI, hyperscalers, data centers and digital infrastructure outpacing energy production and cleantech deployment. Renowned leaders from diverse global regions, Hon. Roger Martella of GE Vernova, Philip Haddad of Masdar Americas, Roberto A. Herrera of InterEnergy and Tom TerBush of EPRI International shared valuable insights with grid problem solvers. What’s the true scale of AI and data-center growth between now and 2030? How can this growth become a catalyst for clean energy? How do we supercharge grids to keep up with AI and data-hungry infrastructure?

While scenarios vary across global regions, a central theme emerged: The “time‑to‑power” gap in meeting demand is the core challenge and opportunity. The theme was acceleration – act fast and serve. The technology and energy resources we need already exist, and what’s most needed now is collaboration, speed and scale. Success for countries, businesses and consumers hinges on whether we can deploy holistic grid solutions on an exponential scale in lockstep with hyperscalers. I firmly believe we can.

Understanding the Scope & Scale of the Problem  

Never have we seen such a rate, scale, and acceleration driving the need for more power, impacting industries and communities across the global economy. The International Energy Agency (IEA) estimates data-center electricity use hit 415 TWh in 2024 and could more than double by 2030. Our panel discussed how hyperscalers plan roughly $320B in infrastructure investment this year; U.S. load growth has moved from ~0.5%/yr to ~3%, with ~40% of the next decade’s growth tied to AI.

Regions are feeling it. In the Middle East, hyperscaler capacity is expected to triple from 1 GW in 2025 to 3.3 GW by 2030, according to Arizton and Mordor Intelligence. The Latin American Energy Organization (OLADE) projects data-center activity could reach 5% of total regional electricity demand by 2035. The United States is expected to be the fastest-growing market for data centers, growing from 25 GW of demand in 2024 to more than 80 GW of demand in 2030.

Our panelists explored how the effects of data-center and AI-driven energy demand vary widely by country, grid maturity, and regulatory structure. In the U.S., rising load from hyperscalers has fueled tariff and rate-payer debates – for example, concerns that new data centers could drive up electricity rates in states like Indiana and North Carolina. By contrast, Paraguay and similar nations with abundant hydropower see positive impacts, as hyperscalers help balance generation and enhance grid stability. These experts concurred – countries have to adapt to what’s happening.

We addressed four critical levers: time, money, regulation and permitting. Our discussion explored bottlenecks like transmission, permitting, and aging infrastructure – all expected to exacerbate upward pressure on power prices in the U.S. and in other countries. Panelists pointed out that some countries lack the consistency or speed that private projects require, impacting their competitive edge in attracting hyperscaler investments.

Solutions from Collaborators, Not Single Actors

While hyperscaler demand poses challenges, it is also catalyzing innovative partnerships and opportunities. While no two global regions are the same, we share a common challenge: our countries, communities and economic health hinge on getting this right.

Panelists discussed how hyperscalers’ capital enables rapid experimentation with new models. Partnerships span grid operators (grid-enhancing tech, flexible load), demand aggregators, and tech providers to accelerate siting and flexibility. We explored the promise of public-private-private-private partnerships and how we will quickly see the fruit of this approach.

We explored how countries must balance attracting hyperscaler economic investments with protecting rate payers from rising electricity costs and grid strain. The economic opportunity is immense and undeniable. McKinsey research estimates that AI could help create between $2.6 trillion and $4.4 trillion in economic value throughout the global economy. But the potential for soaring consumer costs is already hitting hard, such as in places like Ireland and Virginia. Discussion underscored how updating regulatory frameworks is key.

Our session explored how to unleash the full potential of clean energy technologies on unprecedented local-to-global scale, while smartly and strategically leveraging the full diversity of our energy resource mix. We need to work together as an energy industry to deploy the best available electrons. We explored how natural gas continues to play a critical role in the transition while acknowledging the carbon factor and supply chain delays too long to meet today’s hyperscale needs now. Dispatchable power has returned to the top priority: gas and nuclear anchor 24/7 loads; SMRs are real with a first Western project under construction near Toronto targeting 2029 commissioning. Renewables remain vital and complementary; every capacity dollar should be matched with grid (electrification + software) investment. By focusing on bringing the best of our diversified resources and cleantech innovations forward, we can turn the surging demand problem into one of the greatest grid modernization success stories.

Four Pillars for Power Solutions 

At Electric Power Engineers (EPE), our mission is to engineer a successful energy transition. This unfolds across four pillars: a grid powered by reliable, resilient, affordable and flexible energy for all. These tenets were front and center at World Energy Week and our hyperscaler session.

• Reliability. Reliability must be a design requirement. We must treat data centers as multi-stakeholder energy projects, not just tech infrastructure. Local grids are already straining under dense load growth. Solutions like Bring-Your-Own-Power (BYOP) models and microgrids are being adopted as competitive edges. Commercial pathways include utility sales, virtual PPAs, and REC delivery; some states enable behind‑the‑meter ‘islands.’ Near-term builds emphasize behind-the-meter microgrids (renewables + storage + often gas backup) with the bulk grid as backup; longer-term exploration includes nuclear and geothermal.  
• Resilience. The need for resilience is growing as urgently as hyperscaler demand. Public safety, national security and economic stability depend on it. Data centers must be seen as critical infrastructure; outages cause ripple effects through many facets of economies and communities. Solutions like distributed energy resources (DERs), including microgrids, solar + storage, and islanding systems can sustain power for days during crises.   
• Affordability. In the U.S. and internationally, explosive demand is driving up wholesale prices, causing soaring costs and outage risks in some regions. Affordability hinges on flexibility and resource diversification. Portfolios that effectively balance clean, firm, and dispatchable resources get the best results for rate payers and power stakeholders alike. Hybrid contracting portfolios blending long-term renewable PPAs with short-term merchant deals and dispatchable capacity hedges price volatility. On-site generation and BYOP operating during peak-price periods lowers exposure to spikes and enhances energy independence.  
• Flexibility. We must scale flexibility fast. Without flexibility, operators face curtailment or fallback on fossil peakers when clean energy resources could be available. Deploying batteries, virtual power plants (VPPs), and demand response solutions help stabilize and optimize grid performance in these fast-changing conditions. Every energy stakeholder – from hyperscalers to households – has the potential to participate as a flexible player interacting in the grid of the future. It’s exciting to see record growth in battery energy storage systems (BESS) deployment. Batteries stabilize frequency, absorb power bursts, and generate ancillary-service revenue. VPPs orchestrate distributed batteries, generators, and flexible loads into dispatchable resources.

While I am energized by this conversation we began at World Energy Week, the challenge before us will require the best in us as collaborators and individual players. Participants in our session agreed – AI and data-center growth are reshaping power systems in regionally specific ways, posing reliability and cost challenges while also unlocking opportunities for modernization, investment, and clean-energy scaling where policy and collaboration align.  

The hyperscaler dilemma is complex; there is no single, much less simple, solution. Collaboratively, energy partners and grid problem-solvers have everything it takes to turn one of the greatest power engineering problems of our era into one of the most transformative chapters in our global energy transition story. The grid of the future is within reach. But what we do next will determine how we meet this moment. 

Now – let’s collaborate, accelerate, and deploy.