The Power Crunch Is Rewriting the Rules for Facilities Expansion

Power is the New Bottleneck

The Energy Information Administration expects electricity generation to grow 2.2% in 2026 and 1.7% in 2027, following the 2.7% growth in 2025. If that forecast holds, it would mark four consecutive years of growth for the first time in more than two decades. Meanwhile developers face increasingly long waits for the substations, transmission capacity, and generation; customers seeking 200 MW or more are often facing five years or longer from their initial interconnection request to commercial operation, depending on the upgrades required.

From Waiting for Capacity to Creating Capacity

That gap in time is changing how facilities manage their growth strategy. Rather than treating grid availability as a fixed condition that determines when a project can expand, owners can evaluate utility service alongside distributed energy resources (DERs), including onsite generation, battery energy storage systems (BESS), solar, efficiency upgrades, and controllable load management.

Together, these methods can change when, where, and how a facility draws power from the grid – while also giving facilities more control over cost, reliability, and exposure to grid constraints. Energy storage can reduce demand during expensive peak periods, absorb excess onsite generation, and respond quickly to changes in facility load. Dispatchable generation can support critical operations during an outage or supplement grid supply when conditions require it. The result is a facility that can manage its power use more actively rather than relying on a single supply path.

The Business Case for DERs

That flexibility can create value well beyond backup power. BESS can absorb or supply energy quickly when a facility’s demand changes, while demand-response capabilities can shift nonessential consumption away from periods when the utility power is most constrained. Flexible loads can adjust in response to more than just system conditions and peak periods, also factoring in tariff signals and weather events. Solar, energy storage, and efficiency measures can reduce purchased electricity and support emissions goals. Dispatchable onsite resources can provide continuity for the loads that cannot tolerate disruption.

The value of a DER portfolio comes from stacking these functions, though organizations need not install every available technology for success. A practical objective is to give each resource a defined operational role while preserving capacity needed for critical loads. Define each power infrastructure asset’s role: protect critical operations, reduce peak exposure, manage energy costs, support sustainability targets, or provide additional capacity during a utility constraint.

Why Utilities are Embracing Flexible Loads

Utilities have a stake in this flexibility as well. A large facility equipped with visible, controllable resources can be easier to accommodate than one whose full load arrives abruptly and operates without regard to local system conditions. Coordinated DERs can help manage peak demand, relieve localized congestion, support voltage and frequency needs, and in some circumstances defer portions of conventional grid investment. Recent FERC action seeking standardized processes for large-load interconnection and new transmission-service options for flexible loads reflects the need for utilities and large customers to develop more workable arrangements as demand accelerates.

Designing Energy Infrastructure Around Business Priorities

Technology selection ultimately starts with a facility’s operating requirements. Energy systems should be designed around the facility, rather than an attempt to recreate the grid behind the meter. A hospital might place the highest value on islanding and uninterrupted critical care. A manufacturer may focus on power quality, production continuity, or peak-demand management. A data center may prioritize firm capacity, redundant supply paths, and predictable scalability. The technology mix follows those requirements, as do the commercial and operating agreements with the serving utility. By uniquely tailoring to the facility’s priorities, the system is optimized to contribute flexibly to meet – but never compromise – those priorities.

DERs do not eliminate the need for new generation, transmission, substations, and distribution upgrades. They can, however, give facilities a productive role during the time periods required to build that infrastructure. For owners facing years-long connection timelines, confronting higher demand charges, outage risk, aggressive growth schedules, or clean energy commitments, the question is no longer whether to deploy onsite resources, but how to integrate them with utility service to support growth, reliability, and cost management.

As power availability becomes a defining factor in where and how facilities grow, Ameresco’s latest white paper examines how developers, utilities, and energy partners are rethinking energy strategy to move from grid constraints to scalable, site-specific power solutions.