Predictions of rising surety capacity demand in 2026 are often described as a general consequence of higher infrastructure spending. That explanation is largely accurate, but it understates the specific mechanism most likely to shape surety markets in 2026. The sharper, more decision-useful view is that the data center construction cycle, paired with the surge in energy and grid work required to power those facilities, is creating a two-stage construction pipeline that expands bonded volume, increases average contract size, and raises the importance of contractor prequalification. In short, more data centers mean more power projects, and that combined workload is positioned to pull more surety capacity into the market in 2026. The data center boom and power appetite will affect surety companies significantly.
The ‘data center story’ matters for surety companies because it converts digital demand into physical, schedule-critical construction. Data centers are capital-intensive, equipment-dependent, and commissioning-sensitive assets. Their owners typically face time commitments to customers and revenue penalties for delayed delivery. That pushes owners, lenders, and counterparties toward risk transfer tools that reduce completion uncertainty, including performance and payment bonds. As the number of projects rises and as their scopes broaden, the surety market sees both higher bond counts and higher aggregate exposure.
Electric load growth is the most direct indicator that the pipeline will remain active. The U.S. Energy Information Administration’s January 2026 Short Term Energy Outlook anticipates continued growth in electricity consumption and highlights data centers as a key contributor to demand growth through 2027 (U.S. Energy Information Administration 2026a; U.S. Energy Information Administration 2026b). For surety markets, this is not merely a macroeconomic footnote. Rising load implies that energy infrastructure must be accelerated, which means new contracting opportunities that frequently come with bonding requirements. When owners and utilities confront tight timelines and high outage sensitivity, they tend to prefer contractors with strong balance sheets and proven delivery histories, which increases the value of surety prequalification and, simultaneously, increases the pull on available surety capacity for qualified firms.
Federal research and energy authorities have also quantified how significantly data centers could reshape U.S. electricity demand. The U.S. Department of Energy, citing Lawrence Berkeley National Laboratory’s 2024 work, reports that data centers used roughly 4.4 percent of U.S. electricity in 2023 and could reach approximately 6.7 percent to 12 percent by 2028. The same discussion estimates data center electricity use rising from about 176 terawatt hours in 2023 to a range of roughly 325 to 580 terawatt hours by 2028 (U.S. Department of Energy 2024). These ranges signal a structural shift rather than incremental growth. If load rises toward the upper end, the scale of new generation, grid reinforcement, and interconnection work increases accordingly. Each of those categories tends to be delivered through large, multi-contractor contracting structures where owners and financiers frequently require bonding.
Commercial market research is consistent with that trajectory and provides near term context. S&P Global, summarizing 451 Research, has projected U.S. data center demand rising to around 75.8 gigawatts in 2026 and continuing upward afterward (Hering and Dlin 2025). In parallel, JLL’s 2026 outlook describes a construction supercycle and anticipates large additions in global data center capacity between 2026 and 2030, while also emphasizing construction cost escalation and the increasing use of onsite power and storage solutions (JLL 2025). For surety markets, the implication is straightforward: larger and more complex projects, delivered faster, tend to increase the use of bonds as a contractual safeguard, particularly where lenders want standardized completion security.
Here the “power appetite” element becomes decisive for my title statement. The surety effect is not limited to the data center buildings themselves. The more consequential driver for 2026 surety markets is that data center growth forces the construction of enabling energy assets outside the data center footprint. Those assets often include substations, transmission and distribution upgrades, utility interconnections, grid hardening, generation additions, utility scale storage, fuel supply tie-ins for thermal generation, and behind-the-meter microgrid solutions. Many of these projects face long equipment lead times, tight outage windows, right-of-way constraints, and regulatory milestones. Complexity and mission criticality increase the owner’s preference for bonding on the prime contract and sometimes for subcontractor bonding as well.
Contracting norms reinforce why surety demand rises as contract values rise. On federal construction, standard clauses generally require performance and payment bonds at 100 percent of the original contract price, with additional coverage needed if the contract price increases (Federal Acquisition Regulation 2026). Public works contracting also rests on the broader statutory framework requiring bonds for federal public buildings or public works (40 U.S.C. § 3131 2025). Even when data centers are privately financed, lenders frequently adopt bond requirements that mirror public sector practices because the economic consequences of nonperformance are severe. Also, our traditional bond forms and underwriting practices provide a familiar discipline.
The infrastructure spending environment remains relevant, but as a foundation rather than the marginal driver in this specific narrative. Federal reporting on IIJA funding status indicates continued movement from enacted funding to obligations and outlays, supporting a sustained baseline of public construction activity (U.S. Department of Transportation 2025). Industry reporting entering 2026 similarly points to durable construction demand while highlighting constraints such as labor availability, cost volatility, and schedule pressure (Construction Dive 2026). The key point for your title, however, is that data centers magnify the infrastructure baseline by adding a privately anchored project type that nevertheless pulls in large volumes of utility and grid work, often in the same regions and time windows. That coupling pushes surety markets in two ways: it increases total bonded work, and it concentrates demand in specialized contractor classes, especially electrical, power, and high-end mechanical trades.
Surety capacity demand in 2026 rises not only because there are more projects, but because the average risk profile and scope complexity both increase. Data center delivery depends on high-performance mechanical, electrical, and plumbing integration, plus commissioning and energization milestones that are intolerant of delay to the EXTREME. Energy projects that serve data centers add further interface risk between utilities, EPC firms, specialty subcontractors, and permitting authorities. As complexity rises, owners prefer contractors with stronger financials and deeper experience. That has two market effects. First, stronger contractors may require larger single job limits and higher aggregate programs to support expanding backlogs. Second, weaker or newer contractors may face tighter underwriting, higher collateral requirements, or reduced limits. The result is an overall rise in capacity demand, paired with more selective capacity allocation.
The global market context suggests that surety remains a growth segment, but not in an evenly distributed way. Broker market commentary continues to characterize surety as expanding, while also noting that underwriting discipline and loss experience affect where capacity is deployed and at what price (Aon 2025). Trade association and international surety company executive sentiment similarly reflect growth expectations while acknowledging performance pressures that can influence underwriting posture (International Credit Insurance and Surety Association 2025). For 2026, the implication is that surety markets may have ample aggregate capacity, yet will experience localized tightening in contractor classes or regions most exposed to data center and power project clustering.
To give some memorable perspective without undermining my academic rigor here, I’ll offer a metaphor. The 2026 data center wave is like opening a chain of all-night diners for a neighborhood of professional athletes. The diners are the data centers, but the real scramble is securing the supply chain of groceries, kitchens, and delivery trucks that keep them fed. In construction terms, the “groceries” are megawatts, substations, and interconnections. When the diners multiply, the supply chain projects multiply too. Sureties can get REALLY busy REALLY quickly, because more parties insist on guarantees that dinner will be served perfectly to picky diners and on time.
My point is supported by the causal chain observed in public forecasts and market outlooks. Data center construction growth is increasing electricity demand. Rising electricity demand is pulling forward grid and generation investment. Those projects, in turn, typically involve large contracts, complex scopes, and schedule-critical delivery that increases the use of performance and payment bonds. The combined effect in 2026 means higher surety capacity demand and more consequential surety market dynamics, particularly around limits, aggregates, and underwriting selectivity. Data centers and the power appetite of those centers will affect surety companies. This is not merely another construction category to take lightly. They are a load-driven construction engine that brings its own power infrastructure ecosystem, and that ecosystem is precisely what is poised to pressure and expand surety markets in 2026.
~ C. Constantin Poindexter, MA, JD, CPCU, AFSB, ASLI, ARe, AINS, AIS
Bibliography
- Aon. 2025. 2025 Global Construction Insurance and Surety Market Report. Aon.
- Construction Dive. 2026. “5 Construction Trends to Watch in 2026.” Construction Dive. January 2026.
- Federal Acquisition Regulation. 2026. “52.228 15 Performance and Payment Bonds Construction.” Acquisition.gov.
- Hering, Garrett, and Susan Dlin. 2025. “Data Center Grid Power Demand to Rise 22% in 2025, Nearly Triple by 2030.” S&P Global Commodity Insights. October 14, 2025.
- International Credit Insurance and Surety Association. 2025. “ICISA Publishes 2025 Business Sentiment Report.” ICISA. November 3, 2025.
- JLL. 2025. 2026 Global Data Center Outlook. Jones Lang LaSalle. January 2026.
- U.S. Department of Energy. 2024. “DOE Releases New Report Evaluating Increase in Electricity Demand from Data Centers.” U.S. Department of Energy. December 20, 2024.
- U.S. Department of Transportation. 2025. “Infrastructure Investment and Jobs Act Funding Status as of September 30, 2025.” U.S. Department of Transportation.
- U.S. Energy Information Administration. 2026a. “Short Term Energy Outlook January 2026.” U.S. EIA. January 2026.
- U.S. Energy Information Administration. 2026b. “EIA Forecasts Strongest Four Year Growth in U.S. Electricity Demand Since 2000.” U.S. EIA Press Release. January 13, 2026.
- United States. 2025. “40 U.S.C. § 3131 Bonds of Contractors of Public Buildings or Public Works.” United States Code.
