Data centers projected to strain electric grid

Data center electricity consumption is expected to triple in just eight years, according to a recent report from the Boston Consulting Group. They project the tripling to occur in both the amount of electricity consumed (~130 TWh in 2022 to ~390 TWh in 2030) and its share of total U.S. electricity consumption (2.5% in 2022 to 7.5% in 2030). Of that ~260 TWh increase, BCG attributes ~70TWh to the electricity demands for generative AI. The impact of this demand is being felt in some regions of the U.S. For example, “Data centers in central Ohio are gobbling up vast amounts of electricity so fast that American Electric Power expects demand for power to double between 2018 and 2028,” according to a recent Columbus Dispatch article (subscription).

PJM Interconnection, which oversees the flow of electricity in all or parts of 13 states, including Ohio, released its 2024 PJM Load Forecast Report in January 2024. A related press release notes, “Total annual energy use throughout the PJM footprint is expected to increase nearly 40% by 2039, from 800,000 gigawatt-hours (GWh) to about 1.1 million GWh.” The release notes, “Rising energy demand in the region PJM serves is increasingly driven by the development of data centers throughout the PJM footprint, combined with the accelerating electrification of transportation and industry.”

In some cases, data center operators are committing to renewable and low-carbon energy alternatives. For example, a 2022 New York Times Magazine article reports that “Google wants to buy enough carbon-free electricity to power all its data centers and campuses around the world without interruption by the end of this decade.”

However, there are obstacles to making the transition to clean energy. For example, another New York Times article reports, “PJM has already approved an additional 40,000 megawatts of mostly wind, solar and batteries as partial replacements. But many of those projects have been stalled by local opposition or trouble getting vital equipment like transformers.”

The slow transition to clean energy could portend a return to reliance on coal for energy. The Washington Post recently reported that PJM is using coal mines in West Virginia, which had previously been scheduled to go offline, to power data centers in Northern Virginia. PJM also plans to extend the life of two coal plants just outside of Baltimore through 2028, which were slated to close by June 2025, the Washinton Post article reports.