The landscape of energy consumption is shifting dramatically as the digital age accelerates, with U.S. data centers stepping into the spotlight. These digital powerhouses consumed an estimated 150 TWh of electricity in 2023, accounting for around 3% of the nation’s power demand. On a global scale, data center electricity consumption reached approximately 340 TWh, which translates to about 1.3% of worldwide electricity use. But hold onto your hats—this demand is projected to skyrocket through 2030, presenting a double-edged sword for power infrastructure and sustainability initiatives.
The U.S. stands tall as a global leader in data center capacity, housing half of the world’s 10,655 data centers as of early 2024. Regions like Northern Virginia, Dallas-Fort Worth, Phoenix, Chicago, and Silicon Valley are the hotbeds of this growth. Virginia’s “Data Center Alley” has become a behemoth, boasting over 3 GW of capacity with projections indicating an additional 11 GW by 2030. This surge could push Dominion Energy’s peak demand up by a staggering 50% in just six years. The implications? A need for 10 to 15 GW of firm generation capacity, which is no small feat given the challenges of low market prices and transmission constraints.
As the demand grows, so do the stakes. The Electric Power Research Institute (EPRI) predicts that the data center share of electricity load in Virginia could soar to 50% by 2030, with similar trends expected in other major states. The white paper from EPRI outlines four scenarios for potential data center load growth, revealing that electricity usage by hyperscalers has already more than doubled between 2017 and 2021. The forecast suggests that by 2030, data centers could consume between 214 TWh to 404 TWh, which could account for up to 9% of U.S. electricity generation.
What’s more, EPRI has teamed up with major players like Google and Meta to launch the Data Center Flexible Load Initiative (DCFlex), aiming to transform data centers from passive energy consumers to active, flexible grid resources. This initiative will kick off in 2025 and could pave the way for innovative strategies in load management and clean backup power generation.
However, the road ahead is fraught with challenges. The surge in demand is set to strain power markets like PJM, which has experienced flat load growth for the past decade. Aftab Khan, PJM’s executive vice president, highlighted that data centers could account for 12% of total load by 2030, and a staggering 16% by 2039. The anticipated retirement of aging generation assets and the rise of electric vehicles further complicate matters.
The mismatch between the rapid pace of data center construction and the lengthy timelines required for power infrastructure development is a ticking time bomb. Jim Robb, president and CEO of the North American Electric Reliability Corporation (NERC), succinctly stated, “A data center can be built in 2 to 3 years, while power plants and transmission lines take 7 to 20 years.” This disparity underscores the urgent need for a more agile approach to infrastructure development.
With projections for U.S. data center electricity consumption through 2030 ranging widely—from 196 TWh to a staggering 675 TWh—uncertainty looms large. The International Data Corp. forecasts that global electricity consumption by data centers will more than double to 857 TWh by 2028, with AI-specific workloads expected to grow even faster. Yet, the International Energy Agency (IEA) warns of potential constraints, including supply chain bottlenecks and delays in grid development.
As we stand at this crossroads, the decisions made today will shape the future of energy consumption and infrastructure development. The digital transformation is not just a technological shift; it’s a seismic change that demands our attention. The question remains: can we adapt our energy systems swiftly enough to meet the insatiable appetite of data centers, or will we find ourselves grappling with a reliability crisis in the not-so-distant future? The stakes have never been higher.
