Polaris Market Research projects the data centre power and energy management market will reach USD $107.06 billion by 2034, up from USD $35.95 billion in 2025.
That implies a compound annual growth rate of 12.9% as operators invest more in power infrastructure for facilities running artificial intelligence workloads and other dense computing systems. The research highlights electricity supply, power distribution and energy monitoring as central issues for data centre developers as rack power ratings rise and grid connection delays hold up new projects.
Power systems once treated as supporting infrastructure are moving closer to the centre of investment decisions. Operators are replacing older electrical equipment with intelligent power distribution units, higher-capacity uninterruptible power supply systems and advanced switchgear. Rack-level monitoring is also becoming more common as workloads grow more power intensive.
The study identifies energy generation as the fastest-growing solution segment, with annual growth of 13.5% projected through 2034. That reflects a shift towards gas generator sets, solar installations, fuel cells and batteries as operators seek ways to bring new capacity online before utility connections are available.
Regulation is also shaping demand. In Europe, efficiency reporting has added pressure on operators to measure and improve facility performance, while public comparisons of metrics such as power usage effectiveness are likely to influence investment choices.
Operator demand
Hyperscale operators accounted for the largest share of the market in 2025, at 37.33%. The research says these companies are increasingly setting power architecture, onsite generation and monitoring requirements at the design stage rather than adding them after a facility is built.
Colocation providers face different incentives because they sell power capacity to tenants. In that model, rack-level metering and phased additions of protected capacity can directly affect revenue, while modular UPS systems let operators expand within existing halls instead of building new space. Spending by colocation providers is projected to rise at an annual rate of 12.7%.
Software is emerging as a significant part of the market alongside physical equipment. Predictive analytics, digital twins and AI-led controls are being used to estimate future power needs, support upgrade planning and adjust backup systems to free unused capacity.
The market still faces barriers. Advanced power systems require significant upfront spending, and retrofitting live data centres can be difficult because operators must integrate new equipment with legacy infrastructure while maintaining uptime. Connected electrical equipment also increases cybersecurity risks, which may slow adoption among smaller enterprise operators.
Regional split
North America held the largest regional share in 2025 at 38.58%, equivalent to about USD $13.87 billion. The research cites US Department of Energy estimates that data centres could consume 649 TWh by 2030, or about 11.8% of US electricity, underlining the scale of the region's demand challenge.
Europe is expected to grow at 12.3% annually, with the regional market projected to reach USD $27.7 billion by 2034. Efficiency rules and grid constraints are pushing colocation providers towards smart power systems, storage and renewable energy.
Asia Pacific is forecast to record the fastest growth, at 14.6%, reaching USD $30.2 billion by 2034. Expansion in China, India, Japan and Australia is driving the increase as operators add data centre capacity across the region.
In the Middle East and Africa, projected growth stands at 13.6%, supported by demand for efficient equipment in hot climates and interest in solar energy. Grid reliability issues in parts of Africa are also increasing the value of backup and onsite power. Latin America is expected to grow at 13.4%, combining strong renewable energy resources with rising hyperscale demand.
Competitive moves
The market is also seeing consolidation and product development as suppliers try to broaden their reach across power equipment, cooling and control systems. Schneider Electric has worked with AMD on a reference design for racks of up to 246 kW and has introduced software-defined medium-voltage switchgear. ABB has launched a direct current portfolio for artificial intelligence facilities.
Recent deals point in the same direction. Eaton bought Boyd Thermal for USD $9.5 billion to combine liquid cooling with power systems, while Vertiv agreed to acquire UtilityInnovation Group for about USD $1.45 billion to expand its microgrid controls and behind-the-meter offering. Generac is also buying Enercon for switchgear and enclosures.
Onsite electricity supply is drawing investment as well. Bloom Energy has expanded its partnership with Oracle to up to 2.8 GW of fuel cells, with 1.2 GW contracted, while Cummins has announced what it described as its largest battery storage system for a US data centre.
The research suggests technologies including high-voltage direct current distribution, battery storage and microgrid controls are moving from trial deployments towards broader commercial use as operators look for faster and more flexible ways to secure electricity for new capacity.
US Department of Energy scenarios cited in the research place data centres at between 9.5% and 15.3% of US electricity demand by 2030.