US Data Center Power Demand Could Reach 106 GW By 2035

Summary:

BNEF's report comes as some energy industry analysts and executives warn that an artificial intelligence bubble or speculative data center proposals could be fueling excessive load growth projections.

A report from Grid Strategies released last month said utility forecasts of 90 GW additional data center load by 2030 were likely overstated; market analysis indicates load growth in that time frame is likely closer to 65 GW, it said.

A July report from the Department of Energy estimated an additional 100 GW of new peak capacity is needed by 2030, of which 50 GW is attributable to data centers. Those facilities could account for as much as 12% of peak demand by 2028, according to Lawrence Berkeley National Laboratory.

BNEF's data center project tracker shows the industry diversifying beyond traditional data center hubs like Northern Virginia, metro Atlanta and central Ohio into exurban and rural regions served by existing fiber-optic trunk lines for data traffic.

A map of under-construction, committed and early-stage projects shows gigawatts of planned data center capacity spreading south through Virginia and the Carolinas, up through eastern Pennsylvania and outward from Chicago along the Lake Michigan shore. More data centers are also planned for Texas and the Gulf Coast states.

Much of the capacity is poised to materialize on grids overseen by the PJM Interconnection, the Midcontinent Independent System Operator and the Electric Reliability Council of Texas. BNEF predicts PJM alone could add 31 GW of data center load over the next five years, about 3 GW more than expected capacity additions from new generation.

With the expected surge, the North American Electric Reliability Corp. warned late last year of "elevated risk" of summer electricity shortfalls this year, in 2026 and onward in all three regions.

Some experts disputed NERC's methodology, however. MISO's independent market monitor said in June that the group's analysis was flawed and that MISO was in a better position than grid regions not expected to see exponential data center growth, like ISO New England and the New York Independent System Operator.

Other technology and energy system analysts expect a significant amount of proposed data center capacity to dissipate in the coming years due to chip shortages, duplicative permit requests and other factors.

In July, London Economics International said in a report prepared for the Southern Environmental Law Center that meeting projections for U.S. data center load in 2030 would require 90% of global chip supply — a scenario it called "unrealistic."

Patricia Taylor, director of policy and research at the American Public Power Association, told Utility Dive earlier this year that it's common for data center developers to "shop around" the same project across neighboring jurisdictions.

Still, U.S. grid operators face an "inflection moment" as they balance the desire to accommodate large-scale data centers with the obligation to ensure reliable service for all customers, BNEF said.

Source: Zero Hedge