Press release
Data Center Grid Connection Services Market to Reach US$16.58 Billion as Power Access Becomes a Site-Selection Decision
data-center-grid-connection-services-market
Grid access is increasingly a development constraint in its own right. DataM reports that hyperscale projects require connection studies, utility coordination, substations and network upgrades. The International Energy Agency estimates data center electricity use will rise from 485 TWh in 2025 to 950 TWh by 2030; it also highlights the rapid power swings associated with AI workloads, which increase the importance of storage and grid stability.
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Recent Developments:
- June 18, 2026 - FERC opened proceedings on large-load interconnection rules. The commission directed all six regional grid operators to justify or reform tariffs for data centers and other large users. The proceedings address study timelines, cost transparency, co-location, behind-the-meter generation and flexible loads; they are not final tariff changes.
- June 24, 2026 - JERA outlined a power-plant co-location model in Japan. The company said data center operators had expressed interest in direct power supply from its plants, and cited an MOU with Yokohama to explore data center investment at a JERA thermal power site.
- July 1, 2026 - National Grid Ventures agreed to invest US$1.75 billion for a 35% stake in Joulent. The partnership's first project is a proposed 2.67 GW co-located power facility in West Texas, intended to supply a Microsoft-operated data center under a 20-year power agreement. First power is targeted for 2028.
- July 9, 2026 - the U.S. Department of Energy released a draft transmission needs study. It identified data centers and other large loads as reasons for additional transmission infrastructure and opened the study for public comment.
- July 15, 2026 - Japan selected FY2026 "Watt-Bit" demonstration projects. The selected projects bring power, telecom and data center organizations together to test coordinated digital infrastructure development.
- August 3, 2026 - PowerX introduced its Grid Connector for Data Centers. The company's modular system combines power conversion, transformers, high-voltage switchgear, battery storage and cooling. A prototype is planned for early 2027.
- August 17, 2026 - J-POWER announced a data center project in Hokkaido. The planned containerized facility is intended to sell computing capacity powered by NVIDIA HGX B300 and RTX PRO 6000 Blackwell servers, with service targeted for summer 2027. J-POWER says it will examine links to renewable power and workload shifting.
Regional outlook:
United States:
North America accounted for 40% of global market share in 2025, according to the report. EIA data show data center servers used an estimated 7% of commercial-sector electricity in 2025. The current U.S. response combines regulatory review of connection tariffs with investment in co-located generation and transmission planning. For developers, this makes the cost and timing of grid upgrades, and the possibility of flexible or behind-the-meter supply, material factors in project planning.
Japan:
Asia-Pacific represented 27% of the market in 2025, with Japan developing power-and-digital infrastructure together through "Watt-Bit" initiatives and co-location proposals. A specific siting issue is concentration: Japan's Agency for Natural Resources and Energy reports that about 90% of data center floor area was in the Tokyo and Osaka areas in 2023. The agency points to locating facilities near substations with available capacity and advancing grid investment alongside data center development as options for easing that concentration.
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Market Segmentation:
- By data center type: Hyperscale facilities held 48% of market revenue in 2025, the largest segment. Their high, concentrated loads increase demand for transmission-level connections, dedicated substations and utility coordination.
- By service type: The report covers feasibility and capacity assessments, interconnection studies, connection design, utility coordination and permitting, substation and grid design, T&D upgrades, protection engineering, testing and commissioning. Its public summary does not disclose individual service-type shares.
- By connection type: New connections, grid expansions and upgrades, and temporary or backup connections are included. The emerging commercial question is how these options can combine with on-site generation, storage and phased energization to bring capacity online.
ompany Profile
- National Grid develops and operates electricity networks and connection services. Its investment in Joulent extends its work into contracted power and electrical infrastructure for large U.S. loads, while drawing on its high-voltage network and system integration experience.
- Hitachi Energy supplies grid-to-data-center electrical systems, including substations, protection, automation, battery storage and modular grid connections. Its stated offering spans feasibility studies through startup and upgrades.
- Siemens Energy offers grid connections, high-voltage substations, transmission equipment, grid-stability systems and on-site power options for data centers. Its portfolio covers both front-of-meter and behind-the-meter needs.
- JERA is developing a model that places data centers near power generation and supplies electricity directly from plants. In Japan, it is exploring this approach with Yokohama and reports discussions with data center operators in several regions.
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Contact Us:
Sai Kiran
Business Development Manager
DataM Intelligence 4market Research LLP
6th Floor, M2 Tech Hub, Lalitha Nagar, Habsiguda,
Secunderabad, Hyderabad, Telangana 500039
USA: +1 877-441-4866
Email: Sai.k@datamintelligence.com
About DataM Intelligence
DataM Intelligence is a global market research and business intelligence firm delivering actionable insights across healthcare, pharmaceuticals, chemicals, energy, technology, food, and industrial sectors. Through syndicated reports, custom research, consulting, and competitive intelligence services, the company helps organizations identify growth opportunities, navigate market challenges, and make informed strategic decisions in over 50+ countries worldwide.
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