The growth in electricity demand is an actual worry, especially considering the rapid growth of artificial intelligence and rising numbers of data centers in the United States. By 2030, U.S. data centers could consume up to 400 terawatt hours of electricity— equivalent to the total electricity production of the United Kingdom in 2022, according to a recent report from Mizuho Securities.
With more and more data centers going online, demand for power is escalating fast-according to the accelerated schedule of retirements for coal-fired plants. The switch off fossil fuels is also causing supply-demand imbalance. The PJM Interconnection, the biggest grid operator in the United States, has voiced its concerns with regard to system reliability as the old coal plants have been closing quicker than new renewable generation sources are being built into the system,” said Halden.
Virginia is one of the biggest data center markets in the world. However, it’s seriously cash-strapped and transmission-constrained as it tries to import its way to power. The renewable energy sector promised much but problems associated with siting projects, supply chain disruptions and financing issues have put the brakes on infrastructure development in the renewable energy space. “The speed of change in the energy industry is occurring more rapidly than is the ability to include renewable power,” said PJM spokesperson Susan Buehler.
The forecasted electricity demand in PJM’s service area will grow by nearly 40 percent by 2039. Some 40 gigawatts of existing generation capacity are likely to retire by 2030. With 290 gigawatts of renewable projects waiting to connect to the grid, a minuscule portion has actually been constructed.
Utility executives warn that unless investment keeps pace, this could have implications that are felt far beyond the power sector into broader economic growth. For example, American Electric Power has secured commitments for more than 15 gigawatts of data center demand that could strain existing grid capacity.
Toward these challenges, some technology companies are now looking into direct connections to giant sources of power, like nuclear plants. Yet such arrangements are not exempt from scrutiny in the regulatory field and only serve to add to potential supply-side constraints. Industry leaders say it would be better to prepare the infrastructures for such unmatched demand, pointing out that huge economic stakes back such reasoning.
