S&P Global’s 2026 Energy Futures report paints a complicated picture for construction. Data centers, grid upgrades and energy infrastructure are creating one of the biggest project pipelines in a generation. But rising electricity prices, carbon border tariffs on steel and cement, a looming 10 million metric ton copper shortfall, and deglobalizing supply chains are squeezing the margins that make those projects viable. The opportunity is real. So is the pressure.
Construction doesn’t usually show up in energy market reports. Energy analysts talk about terawatt-hours, carbon trading schemes and upstream investment cycles. Contractors talk about pour schedules, subcontractor availability and material lead times. Two different worlds, mostly.
Except they’re colliding. S&P Global’s latest Look Forward: Energy Futures report (2026) covers everything from oil exploration strategies to African infrastructure financing. But buried inside are data points that should be on every construction executive’s radar. Because the global energy system is expanding, electrifying and reorganizing all at once, and the AEC industry is the one that actually has to build all of it.
We pulled out the numbers and trends that matter most for contractors, developers and ConTech operators. Whether you’re bidding on data center shells in Virginia or specifying structural steel in the EU, this stuff has a direct line to your bottom line.
A massive wave of energy-related construction is coming (data centers, grids, power generation). At the same time, the materials, electricity and supply chains you need to deliver those projects are getting more expensive and more politically complicated. Winning contractors will be the ones who understand both sides of this equation.
The Pipeline: Data Centers, Grids and Power Generation
A construction boom driven by electrons, not square footage
The numbers on data center demand growth are staggering. S&P Global estimates that global data center power demand could grow 12% to 16% annually through 2030, reaching roughly 1,550 TWh. To put that in context, that’s about equal to the total power consumption of all of Latin America. Every one of those terawatt-hours needs physical infrastructure to generate, transmit and consume it, which means substations, transmission lines, cooling systems and the buildings that house them.
In the US specifically, power demand growth has averaged just 0.3% per year over the past 15 years. That figure is now climbing sharply. S&P Global forecasts capacity additions averaging 71 GW per year from 2026 to 2035, a significant jump from the 43 GW per year over the previous decade. For contractors, that’s not an abstract forecast. That’s steel, concrete, copper and labor at industrial scale.
Europe tells a similar story from a different angle. Despite slower electricity demand growth, S&P Global anticipates more than $1.5 trillion will be invested in Europe’s electricity sector over the next five years, a 50% increase on the previous five-year period. And 40% of Europe’s grid assets are more than 40 years old, built for a fossil fuel system that’s being asked to do something completely different. The rebuild-and-upgrade pipeline for transmission and distribution alone is enormous. If you’re in data center construction, this is the macro backdrop to what you’re already seeing on the ground.
The Squeeze: Materials, Carbon Tariffs and Electricity Costs
The same forces creating demand are inflating your input costs
Here’s where it gets uncomfortable. The energy transition that’s generating all this construction demand is also making it harder to deliver. Start with electricity prices. US electricity costs rose 6.7% in 2025 while broader consumer inflation ran at 2.7%. In Europe, retail prices remain well above pre-2022 levels despite gas prices falling from their crisis peaks. For construction firms running tower cranes, batch plants and temporary power on active sites, that’s a direct hit to project costs.
Then there’s the carbon question. The EU’s Carbon Border Adjustment Mechanism (CBAM) started charging on imports of steel, aluminum, cement, fertilizers, hydrogen and electricity from January 2026. If you’re a contractor or developer specifying structural steel or cement sourced from outside the EU, CBAM adds a cost based on the carbon intensity of those materials relative to EU carbon prices. S&P Global notes the policy has already caused market participants to delay negotiations and deals because of uncertainty around default carbon intensity values. That kind of procurement hesitation ripples straight through to project timelines.
And then there’s copper. S&P Global projects global copper demand to rise about 50% by 2040, reaching approximately 42 million metric tons. Without major new investment, there could be a shortfall of around 10 million metric tons. The constraint isn’t demand, it’s the 17-year average lead time to bring a new copper mine online. Copper is in every cable, transformer, switchgear panel and motor on your projects. A tightening market means higher prices and longer lead times for electrical equipment, which is already one of the hardest procurement categories in data center and industrial construction.
The grid is no longer passive enabling infrastructure; it has become critical. The large-scale energy expansion needed to meet AI-driven demand can only progress as fast as the grid allows.S&P Global, Look Forward: Energy Futures 2026
Supply Chain Friction: Deglobalization Hits Construction
Trade barriers are restructuring how you source and build
The S&P Global report describes an upstream oil and gas industry adapting to a deglobalizing world where steel from Argentina gets used in platforms designed in the UK and built in South Korea before deploying to Brazil. That world order has shifted, they write, and the construction industry faces the same pressures. Tariffs on steel (25% in the US), trade restrictions on Chinese-manufactured components, and growing supply chain nationalism are forcing a rethink of procurement strategies.
The report notes that upstream costs are expected to keep rising in 2026 despite a slowdown in project activity, driven by tariffs, switching costs and persistent inflation in specialized equipment. Oilfield service companies are consolidating, which means less competitive pressure on pricing. For anyone in energy construction, the dynamic is familiar: fewer suppliers, longer lead times, higher prices.
The copper supply chain is a case study in these pressures. China currently accounts for roughly 50% of global copper smelting and refining capacity. Western governments are actively trying to reduce that dependence through domestic production incentives, friend-shoring and strategic stockpiling. The US has designated copper as a critical mineral and is pursuing what S&P Global describes as “America-First” deals for domestic projects. All of this adds friction and cost to a material that’s already in short supply. As we’ve covered previously on Bricks & Bytes, construction’s biggest challenges often come from outside the industry itself.
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Join 2500+ ReadersThe Regional Picture: Where the Work Is (and Isn’t)
Uneven demand, uneven risk
The energy transition isn’t happening at the same pace everywhere, and that matters for construction firms planning their geographic exposure. In the US, the data center boom is concentrated in Virginia, Texas, Arizona, Ohio and the Pacific Northwest, each with very different labor markets, permitting regimes and utility constraints. S&P Global notes that explosive data center growth driven by AI is straining aging local grids, raising risks of capacity shortages that could delay projects.
Europe is in a different position. Electricity demand has actually fallen since the 2022 energy crisis, dropping about 6% below pre-crisis levels. The policy reset S&P Global describes means slower electrification, steadier gas demand and a more cautious investment climate. With that said, the opportunities in renewables, energy storage, gas-fired generation and grid infrastructure remain substantial. Europe is expected to attract 17% of global clean energy capacity investment through 2030.
Africa presents the most extreme version of the gap between need and delivery. S&P Global forecasts the continent’s energy demand will double by 2050. Refined product demand has more than doubled since 1990 while refining capacity barely grew. The constraint isn’t the size of the opportunity, it’s bankability, financing and political risk over multi-decade project lifecycles. For international contractors, the report suggests that capital will flow to markets demonstrating policy stability and regional coordination.
- US firms: Data centers and grid upgrades are the dominant pipeline, but electricity affordability politics could slow permitting and rate approvals.
- European firms: Grid modernization and renewables remain strong, but slower electrification targets and policy reviews add uncertainty to long-term demand.
- International contractors: Africa’s infrastructure gap is the biggest long-term opportunity, but requires sophisticated financial structuring and regional coordination to unlock.
Energy Transition Impact: Quick-Reference by Sector
| Factor | Impact on Construction | Timeline | Severity | Key Region |
|---|---|---|---|---|
| Data center demand (12-16% annual growth) | Massive pipeline for GCs, MEP and civil contractors | Now – 2030 | High (positive) | US, Europe, Asia |
| Grid modernization ($1.5T European investment) | T&D construction, substation upgrades, cable installation | 2026 – 2035 | High (positive) | Europe, US |
| EU CBAM on steel and cement | Higher material costs for EU projects, procurement delays | Active from Jan 2026 | Medium | EU (UK version coming) |
| Copper shortfall (~10M mt gap by 2040) | Rising electrical equipment costs and lead times | Gradual, accelerating | High (negative) | Global |
| Electricity price inflation (6.7% US, elevated EU) | Higher site operating costs, pressure on all-electric designs | Ongoing | Medium | US, Europe |
| Supply chain deglobalization | Tariffs on steel, restricted Chinese components, fewer suppliers | Ongoing, accelerating | Medium-High | US, EU |
FAQ
The shift toward electrification and digital infrastructure is creating enormous physical construction demand. Data centers need shells, cooling systems and power connections. Grids need new transmission lines, substations and distribution networks. Renewable energy installations need foundations, access roads and grid tie-ins. S&P Global estimates US power capacity additions will nearly double to 71 GW per year through 2035. (Source)
The EU’s Carbon Border Adjustment Mechanism charges importers based on the carbon intensity of materials like steel, cement and aluminum. It started imposing costs in January 2026. For construction firms sourcing materials from outside the EU, this means an additional cost layer that varies depending on where materials are manufactured and how carbon-intensive the production process is. The UK is developing its own version. (Source)
S&P Global projects a roughly 10 million metric ton copper shortfall by 2040 if current investment trends continue. Copper is used in virtually every piece of electrical infrastructure on a construction project, from cabling to transformers to switchgear. With new mines taking an average of 17 years to develop and declining ore grades at existing ones, this isn’t a problem that resolves quickly. Expect tighter availability and rising costs for electrical equipment. (Source)
Yes, on two fronts. First, direct site costs: running cranes, temporary power, batch plants and equipment all get more expensive when electricity prices rise. US electricity costs grew at 6.7% in 2025 versus 2.7% general inflation. Second, design implications: projects targeting all-electric or net-zero performance face higher operational cost projections, which can affect viability and client appetite. In Europe, persistently high retail prices have actually reduced electricity consumption. (Source)
Governments are increasingly imposing tariffs, trade restrictions and local content requirements on construction materials and components. The US has 25% tariffs on steel, growing restrictions on Chinese-manufactured equipment, and new critical mineral policies. Europe’s cybersecurity regulations could restrict procurement of electrical components from certain jurisdictions. For contractors, this means fewer supplier options, longer lead times and higher costs, particularly for specialized electrical and mechanical equipment. (Source)
Data center construction is the most immediate winner, with power demand growing 12-16% annually. Grid infrastructure (transmission, distribution, substations) is a close second, especially in Europe where 40% of assets need replacement. Renewable energy installation continues to grow globally. Oil and gas construction is also returning, though with tighter capital discipline and different risk profiles than previous cycles. The common thread is electrical and power-related construction, which is growing faster than any other segment. (Source)
Three priorities stand out. First, understand your carbon exposure, especially if you’re procuring steel or cement for EU projects, because CBAM costs will flow through to project budgets. Second, build longer procurement horizons for copper-intensive electrical equipment. The supply is tightening and that trend accelerates from here. Third, watch electricity pricing trends in your operating markets. The politics of energy affordability are already affecting permitting decisions, rate approvals and project viability in the US and Europe.
