Data Centers Driving Electricity Demand

The forecast for U.S. electricity demand for the next five years has seen a notable increase, with expected growth rising from 2.6% in 2022 to 4.7% in 2023, which translates to an addition of 38 gigawatts by 2028. Key contributors to the growth are industrial, manufacturing facilities, and data centers. However, the estimation did not necessarily consider energy-consuming industries of crypto-currency and cannabis farming, which are estimated to use up to 2.3% and 1% of U.S. electricity. 

Located in eastern Utah, Utility Rocky Mountain Power increased the capacity of its Green River Energy Center from 400 megawatt-hours to 1600 megawatt-hours to meet the increasing energy demand; the project was contracted to rPlus Energies and will start construction in the second quarter of 2024.

Photo credit: Courtesy İsmail Enes Ayhan, Unsplash

In 2024, the U.S. utility-scale electric generating capacity is expected to boost by 62.8 gigawatts, which is 55% more added capacity compared to 2023. Solar energy accounts for the majority of the increased capacity, contributing 36.4 gigawatts; 35% of this solar capacity is planned to take place in Texas, 10% of it is happening in California, and 6% of the plants will be built in Florida. This indicates the possibility of more data centers being powered by green energy, with California (269 centers), Texas (244 centers), and New York (133 centers) being the hub of data centers. 

Data centers already make up roughly 2.5% of the U.S. total electricity demand and are projected to increase their share to 7.5 % by 2030. Several major providers and operators of data centers have made goals to be more clean on energy use. Amazon Web Service aims to use 100% renewable energy by 2025, which is the same as Microsoft Azure. Data centers of Google have been matching 100% of its global annual electricity consumption with purchases of renewable energy since 2017, and the company is aiming to run on 24/7 carbon-free energy by 2030.