Released January 29, 2025 | SUGAR LAND
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Editors note: The seventh paragraph has been corrected to say gigawatts instead of gigawatt hours.
Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Somewhat like open-mouthed baby birds crowding Mama Bird for worms, Mama Electrical Grid--in the U.S. and EU--is crowded with power-hungry energy transition chicks, and data centers handling artificial intelligence (AI) processing are among the hungriest. Electric vehicle (EV) charging, Power-to-X and general population growth are among the others.
In the first volume of this series, we introduced the overarching concerns. Here, we dive into demand vs. supply in the U.S. alone. Next, we will look at the issue in the EU and worldwide. For more information, see January 23, 2025, article - The Rise of Artificial Intelligence and the Significance of Its Energy Demands.
The origin and rise of data centers
Like AI, as noted in part one of this series, data centers housing large computer systems are not new. They began in the 1940s with mainframes, which then required humans to connect wires and manually handle other functions. Of course, those centers processed much less data than current iterations, as pictured in the meme pointing out that today's average smartphone contains many times more computing power than NASA had in its mainframes that handled round trips to the moon.
In addition to AI and related work, other functions of data centers include data storage, e-commerce and additional data processing functions. Redundancy--the duplicating of data across several servers to prevent loss in case of a catastrophe in a single location--increases the need for capacity, as does cloud computing and software-as-a-service, in which both software and data reside at a data center instead of on computers or servers in an office.
According to a Goldman Sachs report, worldwide data center workloads have been increasing significantly for about 10 years. But while their workloads nearly tripled between 2015 and 2019, increases in energy efficiency kept the total power load about 200 terawatt-hours (TWh) per year worldwide.
However, since 2020, efficiency gains have shrunk and data center power consumption has skyrocketed, reaching 400 TWh in 2023, and is expected to mushroom past 1,000 TWh by 2030. By 2028, Goldman Sachs expects AI to account for about 19% of worldwide data center demand.
IIR lists U.S. data center numbers
In the U.S., Industrial Info Vice President of Energy Market Solutions Shane Mullins said the company is tracking 1,793 data center projects worth $705 billion, and noted that both numbers are growing. Another number on the rise is the total power demand. Mullins said, "Total data center power demand is on a path to grow from just 20 gigawatts in 2023 to 11+ gigawatts of data center base load capacity by 2030."
On the growth spurt, Mullins added, "The total number of U.S. data centers could triple and consume up to 12% of the nation's total electricity by 2028."
Not all of that juice goes to the computers. About 40% of a data center's power demand involves its cooling systems because of the heat generated by the electronics. While that may vary by season and by geographic parallel, it is still a key part of the load.
EVs in the mix
How much do EVs require? Figures by the U.S. Energy Information Administration (EIA) from February of 2024 show they used 1.58 million MWh in the first two months of that year, a 52% increase over the 1.04 million MWh consumed over the same period in 2023.
Many predictions of rapid increases in EV power demand between now and 2030 were made in 2024, before President Donald Trump declared an end to tax subsidies for purchasing them. Because of that, any increases could be smaller over the next four years. But Rabobank estimated in November that an increase in EV sales could add between 100 TWh and 185 TWh to U.S. electricity demand by 2030. That would represent 2.5-4.6% of total anticipated consumption.
U.S. power challenges
U.S. power demand has remained fairly flat for the last 20 years. In 2024, it rose 2% over the previous year, according to EIA data. but most prognosticators see demand growth exploding by 2030. Some have predicted a rise of about 13% over 2023 numbers by 2030, mostly driven by the aforementioned factors.
Supply vs. demand--who wins?
Will generation capacity be able to keep up? Opinions vary, but one concerning issue is that most additions in the U.S. will come from solar, followed by wind, which cannot be relied on as baseline supply, although an April 2024 Department of Energy (DOE) said that "clean energy sources (would) meet data center electricity demand." On this notion, IIR Energy Market Strategist Geoffrey S. Lakings pointed out, however, that this appears to be a pipe(line) dream. He said, "I would not be surprised if some ISO/RTOs (independent system operators/regional transmission organizations) were dealing with rolling blackouts this summer because to 'their surprise,' clean energy did not meet data center and other growing electricity demand."
For the short term, the EIA sees little growth in electricity generation for 2025. Most of the growth that they expect will come from renewables, especially solar, which they see adding 26 gigawatts (GW) in 2025.
Mullins noted that major natural gas midstream companies predict data center power requirements to raise natural gas demand by 6-10 Bcf/d by 2028, a number that would seem to counter to the DOE's assertion that green energy will fill the gap.
The next installment will look at EU and worldwide AI power demands.
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).
Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Somewhat like open-mouthed baby birds crowding Mama Bird for worms, Mama Electrical Grid--in the U.S. and EU--is crowded with power-hungry energy transition chicks, and data centers handling artificial intelligence (AI) processing are among the hungriest. Electric vehicle (EV) charging, Power-to-X and general population growth are among the others.
In the first volume of this series, we introduced the overarching concerns. Here, we dive into demand vs. supply in the U.S. alone. Next, we will look at the issue in the EU and worldwide. For more information, see January 23, 2025, article - The Rise of Artificial Intelligence and the Significance of Its Energy Demands.
The origin and rise of data centers
Like AI, as noted in part one of this series, data centers housing large computer systems are not new. They began in the 1940s with mainframes, which then required humans to connect wires and manually handle other functions. Of course, those centers processed much less data than current iterations, as pictured in the meme pointing out that today's average smartphone contains many times more computing power than NASA had in its mainframes that handled round trips to the moon.
In addition to AI and related work, other functions of data centers include data storage, e-commerce and additional data processing functions. Redundancy--the duplicating of data across several servers to prevent loss in case of a catastrophe in a single location--increases the need for capacity, as does cloud computing and software-as-a-service, in which both software and data reside at a data center instead of on computers or servers in an office.
According to a Goldman Sachs report, worldwide data center workloads have been increasing significantly for about 10 years. But while their workloads nearly tripled between 2015 and 2019, increases in energy efficiency kept the total power load about 200 terawatt-hours (TWh) per year worldwide.
However, since 2020, efficiency gains have shrunk and data center power consumption has skyrocketed, reaching 400 TWh in 2023, and is expected to mushroom past 1,000 TWh by 2030. By 2028, Goldman Sachs expects AI to account for about 19% of worldwide data center demand.
IIR lists U.S. data center numbers
In the U.S., Industrial Info Vice President of Energy Market Solutions Shane Mullins said the company is tracking 1,793 data center projects worth $705 billion, and noted that both numbers are growing. Another number on the rise is the total power demand. Mullins said, "Total data center power demand is on a path to grow from just 20 gigawatts in 2023 to 11+ gigawatts of data center base load capacity by 2030."
On the growth spurt, Mullins added, "The total number of U.S. data centers could triple and consume up to 12% of the nation's total electricity by 2028."
Not all of that juice goes to the computers. About 40% of a data center's power demand involves its cooling systems because of the heat generated by the electronics. While that may vary by season and by geographic parallel, it is still a key part of the load.
EVs in the mix
How much do EVs require? Figures by the U.S. Energy Information Administration (EIA) from February of 2024 show they used 1.58 million MWh in the first two months of that year, a 52% increase over the 1.04 million MWh consumed over the same period in 2023.
Many predictions of rapid increases in EV power demand between now and 2030 were made in 2024, before President Donald Trump declared an end to tax subsidies for purchasing them. Because of that, any increases could be smaller over the next four years. But Rabobank estimated in November that an increase in EV sales could add between 100 TWh and 185 TWh to U.S. electricity demand by 2030. That would represent 2.5-4.6% of total anticipated consumption.
U.S. power challenges
U.S. power demand has remained fairly flat for the last 20 years. In 2024, it rose 2% over the previous year, according to EIA data. but most prognosticators see demand growth exploding by 2030. Some have predicted a rise of about 13% over 2023 numbers by 2030, mostly driven by the aforementioned factors.
Supply vs. demand--who wins?
Will generation capacity be able to keep up? Opinions vary, but one concerning issue is that most additions in the U.S. will come from solar, followed by wind, which cannot be relied on as baseline supply, although an April 2024 Department of Energy (DOE) said that "clean energy sources (would) meet data center electricity demand." On this notion, IIR Energy Market Strategist Geoffrey S. Lakings pointed out, however, that this appears to be a pipe(line) dream. He said, "I would not be surprised if some ISO/RTOs (independent system operators/regional transmission organizations) were dealing with rolling blackouts this summer because to 'their surprise,' clean energy did not meet data center and other growing electricity demand."
For the short term, the EIA sees little growth in electricity generation for 2025. Most of the growth that they expect will come from renewables, especially solar, which they see adding 26 gigawatts (GW) in 2025.
Mullins noted that major natural gas midstream companies predict data center power requirements to raise natural gas demand by 6-10 Bcf/d by 2028, a number that would seem to counter to the DOE's assertion that green energy will fill the gap.
The next installment will look at EU and worldwide AI power demands.
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).
