Gartner Says Access to Energy Is Becoming a Major Constraint on Supply Chain Growth

Supply chain growth is increasingly being constrained by energy availability, according to Gartner, Inc., a business and technology insights company. As electricity demand rises, and energy infrastructure faces mounting capacity and reliability challenges, organizations may encounter higher operating costs, delays in expansion plans and obstacles to electrification initiatives.

Gartner predicts that by 2029, most manufacturers without advanced energy management capabilities will experience 20% to 30% higher costs due to price and supply volatility, network congestion, and capacity constraints.

“Many supply chains continue to operate under the assumption that energy is an always-available input,” said Marta Muñoz, Senior Director Analyst, in Gartner's Supply Chain practice. “That assumption is becoming increasingly difficult to sustain. Energy availability is emerging as a factor that can influence where organizations operate, how they expand, and whether they can execute automation and electrification strategies as planned.”

Energy constraints are no longer confined to procurement cost considerations. Rising electricity demand from industrial electrification, AI-enabled data centers and fleet transitions are colliding with aging infrastructure, transmission bottlenecks and lengthy interconnection processes. As a result, energy availability is becoming a structural constraint that affects operational resilience, cost-to-serve, and long-term growth.

Traditional approaches to energy management often rely on financial procurement contracts and assumptions of historical grid reliability. However, these strategies do not address physical limitations such as grid congestion, local capacity shortages or interconnection delays. Gartner research indicates that these constraints are increasingly shaping network design decisions, capacity planning and facility expansion strategies.

Energy constraints can affect supply chain operations in several ways:

• Grid outages: Power disruptions can halt manufacturing and distribution operations, reducing service levels and creating operational interruptions across supply chains.
• Capacity shortages: Insufficient grid capacity can limit access to reliable electricity, restricting operational flexibility, and creating bottlenecks for production growth.
• Interconnection delays: Lengthy timelines for securing new grid connections can delay facility openings, capacity expansions, and other planned investments.
• Energy price volatility: Localized supply-demand imbalances and grid congestion can cause sharp increases in facility-level energy costs, raising cost-to-serve and putting pressure on margins.
• Expansion constraints: Organizations may find that planned facility expansions cannot proceed on schedule because local power infrastructure cannot support additional demand.
• Electrification delays: Limited grid capacity can slow the rollout of fleet electrification, automation initiatives and other energy-intensive modernization programs.
• Supplier disruptions: Suppliers operating in energy-constrained regions may experience higher operating costs, reduced output or service disruptions that create ripple effects across the supply chain.

As energy constraints become a more significant factor in supply chain performance, Gartner advises CSCOs to incorporate energy considerations into strategic planning, network design and resilience initiatives. Organizations that proactively account for energy availability and grid reliability may be better positioned to support growth, improve operational flexibility, and reduce exposure to disruption.

“CSCOs should begin treating energy availability as a core consideration in network design and growth planning,” said Muñoz. “This means evaluating energy constraints during site selection, aligning energy strategies with local grid realities and incorporating energy availability into broader supply chain resilience efforts. Organizations that build greater visibility into energy dependencies and vulnerabilities will be better positioned to manage disruption and support long-term growth.”