• THE GRID
The President Just Banned the One Shortcut Data Centers Had Left
Fifteen percent. That's the gap between how many power transformers America needs right now and how many it can get.
Substations? Short by 8%.
And on August 26, President Trump signed Executive Order 14420. It bans the purchase or import of bulk-power equipment from 24 countries — led by China. The gear it covers runs at 69 kilovolts and above. That's the backbone of the grid.
Wood Mackenzie ran the numbers. The market for power transformers above 10 MVA has grown nearly 300% since 2020. Data centers drove most of that surge. And many of those operators had been buying Chinese-made units to skip the line.
"Utilities have been largely avoiding Chinese suppliers since the first bulk power ban, and a bulk of the impacts will be centered around data centers who have been using Chinese units to minimize lead times."
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That shortcut is now closed. The 100 MVA-and-up segment — the exact size data centers need — is where the crunch bites hardest.
How much money is at stake? More than $22 billion in bulk-power imports have flowed in since 2025. China made up nearly all of it. That pipeline just went dark.
Transformer Shortage
15%
| Substation Shortage
8%
|
2026 U.S. Generation
4,368 BkWh
| 2027 Demand (Est.)
4,211 BkWh
|
Meanwhile, the EIA just released its September outlook. U.S. power generation will hit a record 4,368 billion kilowatt-hours this year. Sales will rise 2% to 4,135 BkWh. And next year? Another 2% jump to 4,211 BkWh. Data centers and factories are pushing demand to heights the grid has never seen.
So demand keeps climbing. Supply of the gear needed to serve it just got tighter. And the one group that had found a workaround — data center builders sourcing from China — just lost it.
The transformer shortage was already the choke point of the AI boom. The White House just squeezed it harder.
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• VOLTAGE
Data Centers Are Done Waiting for the Grid
Twenty-nine percent of data center operators have already built their own power on site. Not planned. Not proposed. Built.
That number comes from a Capgemini Research Institute survey of nearly 800 energy and data center executives. Another 39% say they'll add on-site generation in the next one to two years.
Do the math. Within two years, roughly seven in ten data center operators could be making their own electricity.
It makes sense. Grid connection delays stretch five years or more. Some sites face waits of over a decade. So operators skip the line. They install gas turbines, fuel cells, or microgrids behind the meter.
Cleanview tracked 59 data center projects with about 90 GW of planned on-site power. Only 2 GW of that is running today. By year-end, it should reach 3 GW. The gap between plans and reality is still vast.
But the direction is clear. Bloom Energy found that 61% of data center developers would choose on-site power over moving to a new location if the grid can't serve them.
The grid was supposed to power the AI revolution. More and more, data centers are deciding to power themselves.
• WIRED IN
Signals From the Wire
Vertiv is paying $1.45 billion to buy UtilityInnovation Group, a microgrid and behind-the-meter power firm based in Raleigh. The deal adds on-site generation controls, microgrid switchgear, and power orchestration to Vertiv's data center portfolio. An extra $1.15 billion in earnouts could push the total to $2.6 billion.
Speaking of building faster — Solaris Energy Infrastructure (SEI) bought Omega Foundation Services on September 1 for about $101 million in cash, plus $28 million in debt and 3.6 million shares. Omega is an EPC firm that builds the heavy civil work under data centers. Solaris now has both the power gear and the crew to install it.
Nuclear stocks bounced hard on Tuesday. NuScale (SMR) spiked 15%. Oklo (OKLO) climbed 7%. But zoom out: NuScale is still down over 80% from its October 2025 high. Oklo is off about 47% this year. The bounce looks more like short covering than a new trend — neither company has booked major revenue yet.
The EIA's September Short-Term Energy Outlook confirms what I've been tracking: U.S. power demand is headed to record highs in both 2026 and 2027. Generation will grow 2.2% this year to 4,368 billion kWh. The West South Central region — Texas — leads the growth, even after the ERCOT queue freeze.
Power companies are buying their way up the value chain. That tells you where the money is moving — toward owning the watts, not just renting them.
