The traditional engineering, procurement, and construction (EPC) model in the energy sector is undergoing a significant transformation, driven by a confluence of market realities that are challenging the sector’s long-standing practices. For decades, EPCs have entered projects after utilities completed feasibility studies, secured permits, and negotiated power contracts. Equipment procurement typically followed design, and construction began after approvals, in a sequence that was deliberate, mostly linear, and allowed risk allocation to match project maturity. However, geopolitical tensions, structural shifts in energy infrastructure, and surging electricity demand from artificial intelligence and data centers are upending this model.
Geopolitical tensions have disrupted global supply chains, making the cost and availability of key equipment increasingly uncertain. Executives at the EPC Show 2025 in Houston highlighted that tariffs and trade realignments are prompting developers and EPCs to reevaluate where and when to invest. This uncertainty is compounded by the industry’s effort to balance traditional energy infrastructure with energy-transition work. Gas-fired, nuclear, and renewable energy sources now compete for limited capital and skilled labor under volatile policy conditions.
The surge in electricity demand from data centers is perhaps the fastest-moving disruption. Utilities are reporting unprecedented demand materialization, prompting a rethinking of project timelines, procurement strategies, and contract structures. Entergy, for instance, has seen data center demand in its Gulf Coast territory expand to a 7–12 GW pipeline, up from 5–10 GW just one quarter ago. The company has secured more than 19 GW of generation components and 90% of the materials required for transmission projects through 2030. American Electric Power (AEP) is also leaning into the infrastructure supercycle, with system peak demand projected to reach 65 GW by 2030. AEP has lifted its long-term growth outlook and expanded its capital plan to $72 billion through 2030, with more than two-thirds of that investment targeting transmission and generation.
Dominion Energy is tackling one of the largest simultaneous generation and transmission buildouts in its history as load from data centers surges across Virginia and the Carolinas. The company now has roughly 47 GW of data center demand in various contracting stages, up 17% since last year. NextEra Energy has moved beyond traditional EPC sequencing to a vertically integrated, speed-to-market model aimed at serving hyperscale and industrial load growth. The company’s 30-GW renewables and storage backlog now includes 3 GW of quarterly additions, backed by a domestic supply chain that CEO John Ketchum called “a world-class development platform.”
Southern Co.’s load outlook has also accelerated to levels not seen in decades, prompting a decisive shift toward contract-based generation and forward procurement. The utility has signed four large-load agreements across Georgia and Alabama in recent months totaling more than 2 GW, as part of a 50-GW pipeline of potential incremental demand through the mid-2030s.
However, these pressures come amid an already strained operational profile. Michael Caravaggio, EPRI’s vice president of fleet reliability, noted that six of the top 10 days for electricity use occurred this year. He warned that if flexible capacity isn’t built adequately or fast enough, “it’s a lot of load that makes the system get closer and closer to being put on the edge.”
The urgency of these developments is reshaping EPC contracting. In its November 2025-released 2025 Electric Report, Black and Veatch found that data centers take 18 months from final investment decision to operation, while the grid and power infrastructure required to serve them can take three to six years. “The mismatch is straining utilities as they try to deliver city-scale power on exponentially squeezed timelines,” the report notes.
This fundamental shift in EPC contracting is likely to accelerate innovation in project management, procurement strategies, and contract structures. It may also drive greater collaboration between utilities, developers, and EPCs to navigate complex permitting, aging infrastructure, uncertainty in planning and forecasting, material lead times, and workforce limitations. The energy sector is at a transformative moment, and the traditional EPC model must evolve to meet these new challenges.