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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--By far the fastest growing energy demand sector is industrial computing, according to the U.S. Energy Information Administration (EIA). In a new report, the EIA predicted energy demand from industrial computing in the U.S. will surpass demand from space cooling around 2040 and ventilation by 2050, putting it then at the top of the energy demand list.
In its Annual Energy Outlook 2025, the EIA said, computing accounted for an estimated 8% of commercial sector electricity consumption in 2024. The agency said that computing will reach 20% of commercial sector electricity consumption by 2050.
Click on the image at right for an EIA chart showing projected power use by various sectors to 2050.
"Ultimately, more electricity could be consumed by computing than for any other end use in the commercial sector, including lighting, space cooling, and ventilation," the outlook report said.
Even though computing efficiency will continue to improve, growth of computer demand will overwhelm any gains in efficiency. In 2024, computing used about 100 billion kilowatt-hours per year (BKwh/yr).
The EIA said that amount will more than triple to just under 350 BKwh/yr by 2050. Energy use by computing in 2024 was at the bottom of the EIA's tracked demand category list, just under refrigeration. But computing is expected to pass refrigeration by the end of 2025.
Britt Burt, Industrial Info Resources' senior vice president of research for the Electric Power industry, pointed out that rapid growth in data center power use is already well underway. "Currently, data centers consume roughly 4-5% of electricity load in the U.S. This consumption is expected to double or perhaps triple by the year 2030."
The EIA outlook sees moderate growth for ventilation, the current demand leader, rising from around 210 BKwh/yr in 2024 to just over 300 BKwh/yr by 2050.
Much of the data center growth will be housed in office buildings or standalone data center buildings.
Driving the data center growth is artificial intelligence (AI), Burt said. Uses include processes such as cloud computing and cryptocurrency mining.
For utilities facing this demand growth, keeping up is hard to do.
"Such rapid demand growth presents challenges for power producers and suppliers to form creative strategies to ensure a reliable and efficient electricity supply," Burt said. "The rapid growth of this sector is creating a strain on the existing grid and raising the urgency of needed investment for improvements and expansions for the generation side of the business as well as transmission and distribution system."
As big as the data center demand growth is, all phases of power consumption are growing, except for lighting, where the use of power-saving LED lights has dampened its demand.
"Addressing the dilemma of electricity generation for data centers is only one piece of the puzzle," Burt continued. "The other is the ability to deliver electricity to other customers. The U.S. transmission grid is long past due for modernization and expansion. Much of it is over 40 years old. Plans for investment continue to move forward despite slowdowns from an inefficient and complicated regulatory approval process."
Solutions involve a multi-pronged approach, including renewables, the biggest source of newbuilds, many of which will be jeopardized by the solar and wind tax credit phaseouts contained in the so-called Big Beautiful Bill being considered in Congress. Other solutions include natural gas, which faces supply-chain issues for new gas turbines, and nuclear--both standard plants and small modular reactors (SMRs), Burt said.
An oft-forgotten aspect of data center power demand is the amount of cooling such centers require.
The EIA said, "Because data centers generate heat and require more air exchange, the increase in data center computing also requires more commercial ventilation and space cooling. These uses are sensitive to assumptions about population migration and the weather. Without computing demand, ventilation and space cooling would still grow but at slower rates." In all these numbers, the EIA separated cooling/ventilation power use from that of the data centers' computers.
Typical means of cooling involve refrigerated air conditioning, which is expensive, using about 40% of the total energy demand for a data center. Alternatives being researched include submersive liquid cooling, which can reduce cooling demand by 60-80%, but this is currently a small percentage of the total.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
In its Annual Energy Outlook 2025, the EIA said, computing accounted for an estimated 8% of commercial sector electricity consumption in 2024. The agency said that computing will reach 20% of commercial sector electricity consumption by 2050.
"Ultimately, more electricity could be consumed by computing than for any other end use in the commercial sector, including lighting, space cooling, and ventilation," the outlook report said.
Even though computing efficiency will continue to improve, growth of computer demand will overwhelm any gains in efficiency. In 2024, computing used about 100 billion kilowatt-hours per year (BKwh/yr).
The EIA said that amount will more than triple to just under 350 BKwh/yr by 2050. Energy use by computing in 2024 was at the bottom of the EIA's tracked demand category list, just under refrigeration. But computing is expected to pass refrigeration by the end of 2025.
Britt Burt, Industrial Info Resources' senior vice president of research for the Electric Power industry, pointed out that rapid growth in data center power use is already well underway. "Currently, data centers consume roughly 4-5% of electricity load in the U.S. This consumption is expected to double or perhaps triple by the year 2030."
The EIA outlook sees moderate growth for ventilation, the current demand leader, rising from around 210 BKwh/yr in 2024 to just over 300 BKwh/yr by 2050.
Much of the data center growth will be housed in office buildings or standalone data center buildings.
Driving the data center growth is artificial intelligence (AI), Burt said. Uses include processes such as cloud computing and cryptocurrency mining.
For utilities facing this demand growth, keeping up is hard to do.
"Such rapid demand growth presents challenges for power producers and suppliers to form creative strategies to ensure a reliable and efficient electricity supply," Burt said. "The rapid growth of this sector is creating a strain on the existing grid and raising the urgency of needed investment for improvements and expansions for the generation side of the business as well as transmission and distribution system."
As big as the data center demand growth is, all phases of power consumption are growing, except for lighting, where the use of power-saving LED lights has dampened its demand.
"Addressing the dilemma of electricity generation for data centers is only one piece of the puzzle," Burt continued. "The other is the ability to deliver electricity to other customers. The U.S. transmission grid is long past due for modernization and expansion. Much of it is over 40 years old. Plans for investment continue to move forward despite slowdowns from an inefficient and complicated regulatory approval process."
Solutions involve a multi-pronged approach, including renewables, the biggest source of newbuilds, many of which will be jeopardized by the solar and wind tax credit phaseouts contained in the so-called Big Beautiful Bill being considered in Congress. Other solutions include natural gas, which faces supply-chain issues for new gas turbines, and nuclear--both standard plants and small modular reactors (SMRs), Burt said.
An oft-forgotten aspect of data center power demand is the amount of cooling such centers require.
The EIA said, "Because data centers generate heat and require more air exchange, the increase in data center computing also requires more commercial ventilation and space cooling. These uses are sensitive to assumptions about population migration and the weather. Without computing demand, ventilation and space cooling would still grow but at slower rates." In all these numbers, the EIA separated cooling/ventilation power use from that of the data centers' computers.
Typical means of cooling involve refrigerated air conditioning, which is expensive, using about 40% of the total energy demand for a data center. Alternatives being researched include submersive liquid cooling, which can reduce cooling demand by 60-80%, but this is currently a small percentage of the total.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
