Will the Grid Kill Your Growth? Power Risks You Can’t Ignore
As electrification, AI adoption, and sustainability commitments accelerate, power availability has emerged as a defining, and often underestimated, constraint on business growth. During a Perspectives Impact session featuring experts Keith McHugh and Kaleigh Sharpe, SE Advisory Services, Tom Bailey, Flexential (a leading hybrid IT infrastructure provider), and Hannah Jacob, RWE (a global renewable energy developer), the leaders examined a critical question: Are grid constraints becoming the next hard stop on growth, and what should executives do now?
The grid has become a sleeping risk
SE Advisory Services works across industrial, transportation, aerospace, and manufacturing sectors, industries where continuous, high-quality power is essential to operations.
“For many organizations, grid risk is a sleeping agent,” SE Advisory Services expert Kaliegh Sharpe explained. “It rarely shows up in early planning. Clients often discover capacity or resilience issues only after construction has started, or worse, after operations are already disrupted.”
That late discovery is expensive. In industrial environments, a single hour of downtime can cascade into weeks of lost production, delayed deliveries, and millions of dollars in unrecoverable costs. Yet power availability is still not treated with the same rigor as labor availability, tax incentives, or proximity to customers.
“What we’re seeing is that companies assumed power would always be there, because historically, it was. That assumption no longer holds.”
This risk is not limited to new developments. Facilities that have operated reliably for decades are now encountering constraints, as electrification, AI workloads, and regional load growth collide with aging infrastructure.
Powered land is now the crown jewel
From the data center perspective, Flexential operates at the front edge of grid constraints, engaging utilities years ahead of projected demand.
“The most valuable piece of land today is powered land,” Flexential’s VP of Energy, said. “Nothing else matters if you can’t secure scalable, reliable power.”
This reality is reshaping growth strategies. If sufficient capacity is unavailable at a chosen site, organizations may face delays of five, six, or even seven years, regardless of capital readiness or market demand.
“This isn’t just a data center issue,” Flexential emphasized. “It’s the largest electrification event since post–World War II, and it affects residential, commercial, and industrial customers alike.”
The challenge is compounded by the condition of the grid itself. Many assets are 30 to 50 years old, designed for demand profiles that no longer exist. Energy efficiency and demand response once helped defer upgrades, but they can no longer offset the scale of new load entering the system.
Dispelling the myths around large energy users
Data centers are often portrayed as villains in grid discussions, but Flexential argued that narrative oversimplifies the reality.
“The idea that data centers drive up everyone’s power bills or drain local water supplies isn’t accurate,” they noted.
In practice, large energy users typically fund the infrastructure required to serve them, substations, transmission upgrades, and generation, at their own expense. Those investments ultimately strengthen the grid for all customers.
“We pay 100 percent of the electrical infrastructure costs. That investment benefits the entire utility network.”
Data centers also generate significant tax revenue while placing minimal strain on local services, no heavy truck traffic and no population influx that requires new schools or roads.
“When communities understand the full picture, the conversation shifts from fear to opportunity.”
When utilities can’t keep up, what then?
From the generation side, RWE sees the same demand surge, but also the limits of traditional timelines.
“Even if every utility decided to build new generation today, lead times are long,” Hannah Jacob, Director of PPAs and Structured Origination at RWE explained. “Gas turbines ordered now may not come online until the 2030s.”
Renewables help meet demand, but intermittency introduces new challenges. As a result, the market is rapidly moving toward firmed solutions, including:
- Wind or solar paired with long-duration energy storage
- Hybrid ‘energy campuses’ that combine multiple generation technologies
- Behind-the-meter generation to bypass interconnection delays
“Behind-the-meter solutions are increasingly used as a bridge,” RWE noted. “They allow customers to operate while utilities work through interconnection queues and network upgrades.”
These approaches do not replace the grid, but they provide flexibility at a time when demand growth has outpaced traditional planning models.
Resilience is becoming a growth enabler
Across all three perspectives, resilience emerged as the defining theme.
SE Advisory Services highlighted that many industrial organizations still lack true redundancy and are only now recognizing the business case for it.
“A momentary power disruption can shut down equipment and set production back weeks,” they said. “That risk is driving new conversations about microgrids, backup generation, and higher facility standards.”
Crucially, resilience must align with decarbonization goals. Many electrification initiatives aimed at reducing Scope 1 emissions stall at the final step, when utilities reveal they cannot support the additional load.
“We’ve seen organizations spend a year planning electric boiler projects only to learn the grid can’t support them,” the team shared. “Power conversations need to happen first, not last.”
A strategic shift leaders can’t avoid
All three experts agreed: the organizations most exposed are not the largest energy users, but the least prepared.
“No one is exempt,” SE Advisory Services concluded. “If power underpins your ability to generate revenue, it belongs in your strategic plan.”
Leading organizations are already adapting by:
- Engaging utilities before land acquisition
- Stress-testing long-term load assumptions
- Phasing demand realistically over time
- Investing in resilience where downtime is intolerable
- Treating utilities and developers as strategic partners
As Flexential summarized: “Utilities used to be vendors. Now they are partners in growth.”
The bottom line
The grid itself will not kill growth—but ignoring its constraints might.
In a world where electrification, AI, and sustainability goals accelerate simultaneously, power availability has become a decisive factor in where, and how, organizations grow. Leaders who plan early, invest strategically, and partner deeply will find paths forward. Those who don’t may discover that ambition alone is no longer enough to keep the lights on.
If you’d like to continue the conversation, contact our global experts.