U.S. Energy Information Administration (EIA) reports and energy market analyses

U.S. Power Demand to Surge 16% Over Five Years as AI Data Centers Drive 128 GW Need

Dec 5, 2024, 09:19 PM

U.S. electricity demand is projected to surge by 16% over the next five years, driven by the rapid expansion of data centers and factories, according to recent reports. This forecast is more than triple the estimate from a year ago, highlighting the significant impact of cloud computing and artificial intelligence (AI) on energy consumption. Utilities may need to add approximately 128 gigawatts of new power capacity to meet this demand, equivalent to adding three cities the size of New York to the power grid by 2030. Additionally, plans indicate 90 gigawatts of new data center load by 2029, with data centers expected to demand 600 terawatt-hours by 2030—15% of today's U.S. grid. The International Energy Agency (IEA) warns that the surging electricity demand from AI-driven data centers could hinder climate goals, as data centers may require over 1 gigawatt each and could double reliance on natural gas. With no new nuclear reactors coming to meet the increased demand, gas will play a crucial role in keeping the lights on. There is a call for urgent regulation to prioritize clean energy. Companies like Hewlett Packard Enterprise (HPE) are experiencing strong growth, with HPE reporting more than 30% growth in server sales due to the AI boom. A recent deal by Microsoft further signals the booming demand from data centers to power AI.