Data centers' power demand surging faster, new analysis shows
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Research firm BloombergNEF sees U.S. power demand from data centers reaching 106 gigawatts by 2035, per an analysis issued Monday.
Why it matters: That's a 36% upward revision from its April outlook, "illustrating just how quickly the sector is expanding," the analysis said.
- One gigawatt can power about 750,000 to 1 million homes.
Yes, but: Even that bigger 2035 projection is still pretty conservative compared to estimates from Goldman Sachs, BCG, McKinsey and several others.
The big picture: The study highlights big, interlocking trends.
- Development is moving away from urban areas as facility sizes grow. "Today, US data centers are typically located in suburban areas within 30 miles of major cities," it finds.
- Just 10% of existing data centers exceed 50 megawatts of capacity, yet most in development are north of 100 MW. A handful of gigawatt-scale sites are coming online in the next few years, with more to come later.
State of play: Big tech and the Trump administration are all-in on the AI race.
- One data point: Barclays estimates that Meta, Google, Amazon, Microsoft and Oracle will have roughly $390 billion in combined capex this year, a 71% year-over-year rise with more on the way.
- The Energy Department and Federal Energy Regulatory Commission are working on a new policy to speed up data center grid connections.
- The tech and data center industries are scrambling to find new power sources — including re-start of shuttered plants — to supply electricity for training and using AI models.
Friction point: The boom is bringing fears of localized grid strains and wider power system problems as overall energy demand rises.
- "These pressures point to an inflection moment for US grids: the desire to accommodate AI-driven load without undermining reliability or driving up power costs," BloombergNEF said in a summary of the report.
What we're watching: The simmering data center backlash in some regions as electricity prices rise for a host of reasons.
