The AI boom isn’t happening as fast as it could be.
As a recent International Energy Agency report on energy and AI lays out, the shortcomings of the existing power infrastructure are one of the main reasons why the sector might not expand as quickly as initially anticipated; approximately 20% of planned data center projects risk significant delays because of grid congestion.
But skilled labor shortages are also bottlenecks. As outlined in the IEA’s 2023 World Energy Employment report, the energy sector has been having a hard time finding enough people to hire for a while now. And the surge in power infrastructure needs caused by the AI gold rush seems to have been exacerbating the issue.
Over 70% of employers in the energy sector report struggling to find all the skilled labor they need — and electrical and power engineers are in particularly high demand.
Christopher Wienbeck, vice president of sales and business development at the consultancy Electric Power Engineers, told Latitude Media that while his company is still mostly dedicated to generation projects, data centers make up a growing segment of their work.
“We are expecting four to six times growth on data centers alone this year,” he said. “And if you think about all the volume that we did last year for data centers, we did almost as much in the first quarter of this year alone.”
Wienbeck is not alone. David Williams, a senior principal at PAE Engineers, has been working on data centers for years. But he noted that over the past few years data centers went from being 5% or 6% of the business to over 20%, with about half of his firm working on data center projects at some point.
Meanwhile, the major engineering group Jacobs has seen, on average, over 200 new data center projects per year since 2020, according to a spokesperson. Jacobs had 10 “unique pure data center clients” in 2016; in 2024, that number had jumped to nearly 30.
Tight capacity
This is part of an industry-wide trend.
Jason Carolan, chief innovation officer at U.S. data center developer Flexential, told Latitude Media that for some engineering companies, this might mean pausing new projects for a while. “I was talking to a power electrical consulting and contractor [recently], and they said their business is two to three years out to go do anything else at this point,” he said.
If you think about all the volume that we did last year for data centers, we did almost as much in the first quarter of this year alone.
But Holger Peller, global director for power and energy at WSP, thinks the situation is not “that dire,” and that “the more significant challenge is the supply chain for equipment.” But he acknowledges the market is constrained: “In the short term, the next three to six months, engineering capacity is tight across the market,” he wrote in an email.
Consequently, engineering companies can and have to be selective in choosing who they work with. WSP, for example, only works with seasoned developers and avoids engaging with new startup developers. And PAE Engineers is mindful about taking on only the new projects it has the bandwidth for.
“If we said yes to everything, we’d be in trouble,” Williams said.
Redirecting resources
Aside from flooding engineers with work, the surge in data center projects might also redirect resources from other sectors.
Getting data centers online requires a similar skillset as both connecting renewable generation assets and retooling old gas infrastructure. Data center developers have a sense of urgency at the moment — and are flush with cash. If they hire electrical engineers away from other companies, the shortage could not only slow down AI infrastructure development but also create challenges for the power sector as a whole.
James Richmond, founder and president of e2companies, which develops and installs microgrids, said the electrical engineers’ shortage is one of the main things slowing the growth of his company, alongside supply chain issues. “Engineers are not in big supply,” he said. “In this space, to hire somebody, you’re only stealing somebody from somebody else.”
Wienbeck has a similar impression of the sector’s challenge: “If you [take into consideration] all the power system engineers across the whole ecosystem — from utility, to developers, to consultants — there’s no doubt they’re being stacked up into working on the load side of things,” he said. “And if you are a utility, all the resources that would normally be working on generation and other projects are being sucked up into the load side.”
Jacobs, meanwhile, is responding to the demand by actively redistributing resources. A spokesperson said the company is “retraining staff who specialize in other areas and upskilling to support data centers, as often skillsets are complementary.”
A short-term problem?
The question facing the industry right now, aside from where to find more engineers, is how quickly the labor problem will resolve — and how it will interplay with other problems in the meantime. Supply chain issues, Wienbeck expects, are both less predictable and more entrenched than labor issues.
“We’ll have this crazy boom for a couple of years, with all the speculation, and everyone trying to do something, but then things normalize,” he said. “We are experiencing this acute pain right now because we don’t have certainty of load speculation and uncertainty around what the market will actually look like.”
However, he added, once regulations are in place and the boom turns into a more predictable market, then “by default” the industry will return to having enough power engineers.
On the flip side, the sector’s current momentum is likely to attract more people to the profession. According to data released last month by the Bureau of Labor Statistics, in the U.S. “overall employment of electrical and electronics engineers is projected to grow 9% from 2023 to 2033, much faster than the average for all occupations.”
It is, in other words, a great time to be an electrical engineer. Williams, for instance, is telling his three kids, “If you want a job, go be an electrical engineer.”
