Data centers are expected to use one-fifth of the electricity generated in the United States by 2035, or four times as much as they do now, according to a new report from BloombergNEF.
Due to the surge in AI computing, data center capacity will increase to nearly 200 gigawatts over the next decade, the report predicts. Roughly half of that capacity will be devoted to training and reasoning, and much of that will continue to be concentrated in the United States. By 2033, the country will host 64% of AI chips based on electricity demand.
Based on previous projections, these numbers are likely to be conservative.
BloombergNEF’s new forecast for electricity demand in 2035 is 83% higher than the consultancy predicted in December. Other organizations have also raised their expectations. Electrical industry nonprofit EPRI more than doubled its 2024 forecast, while S&P’s forecast rose by more than a third from October to April. This revision reflects the rapid pace of data center development across the United States.
BloombergNEF predicts that over the next decade, the majority of new data centers will hit an already strained power grid. The PJM interconnection, which spans from Virginia to Illinois, would send 34% of its power to data centers, while ERCOT, which covers much of Texas, would have to devote 22% of its generating capacity.
PJM already hosts a number of data centers around the country, but has struggled to handle connection demands from both large generators and large loads. It suspended applications for new power sources to connect to the grid for four years, leaving the grid in a precarious position as demand continues to rise.
PJM resumed supply to the new generation source in April, but the situation became so dire that one of its utilities, American Power, threatened to withdraw from the interconnection. Due to the imbalance between supply and demand, electricity prices have increased by 76% in the past year.
Even with congestion, data centers still want to connect to PJM. In the grid administrator’s most recent capacity auction, data centers accounted for 38% of the bill.
Even though the US claims the majority of AI computing, data centers will continue to grow in other regions as well. If AI adoption continues on its aggressive trajectory, by 2033 data centers will generate 1,935 terawatt-hours of new electricity demand worldwide, roughly the same amount as India uses annually.
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