The biggest utilities in the United States expect exponential growth in electricity demand in the coming years from data centers and new technologies such as generative AI.
So great is electricity consumption from data centers that U.S. utilities and regulators have raised significantly their forecasts for peak power demand in the coming decade.
After more than a decade of flatlining power consumption in America, the AI boom and the chip and other tech manufacturing are leading to higher U.S. electricity demand.
As a result, nine out of the 10 largest U.S. electric utilities see the data center boom as the key driver of demand growth, an analysis of recent company reports by Reuters has shown.
Several of these utilities have bumped up their forecasts for short and long-term demand growth and peak demand and are planning higher spending to meet rising consumption, according to the Reuters analysis.
For example, renewable energy giant NextEra Energy said in an investor presentation last month that the U.S. is experiencing exponential growth in demand for power, driven by a surge in demand from data centers.
Consulting firm Grid Strategies published a report earlier this year analyzing data from utilities' regulatory findings. The analysis found that over the past year, grid planners nearly doubled the 5-year load growth forecast, the key drivers being investment in new manufacturing, industrial, and data center facilities.
"The U.S. electric grid is not prepared for significant load growth," Grid Strategies said in the report, noting that a recent "surge in data center and industrial development caused sudden, shockingly large increases in 5-year load growth expectations."
Dominion Energy - which serves Virginia's Eastern Loudoun County, dubbed Data Center Alley and the world's "largest data center market," - has said that "The big drivers of current and future growth include: migration to the cloud as companies outsource information technology functions, smartphone technology and apps, 5G technology, digitization of data, and artificial intelligence."
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More