Mapping the data center power demand problem, in three charts

Load growth from data centers is increasing dramatically — the only question is by how much.

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New Amazon data centers (and a Microsoft data center under construction) in what was once farmland in Northern Virginia (Photo credit: Jahi Chikwendiu / The Washington Post via Getty Images)

New Amazon data centers (and a Microsoft data center under construction) in what was once farmland in Northern Virginia (Photo credit: Jahi Chikwendiu / The Washington Post via Getty Images)

As demand surges, the landscape of data centers is changing. 

There are more builds, which require more energy, and cause more emissions — and a new report from the Electric Power Research Institute put numbers to precisely how much more. 

According to the research, data centers in the U.S. used 150 million megawatt-hours in 2023, the year that artificial intelligence truly took off after the November 2022 launch of OpenAI’s ChatGPT. That’s the equivalent of the average annual consumption of 14 million households.

New data centers are also growing bigger than ever; the report found that it is “not unusual to see new centers being built with capacities from 100 to 1,000 megawatts.” 

And load growth is only expected to increase — the only question is by how much. 

The load growth to come

As AI applications eat up more data center capacity, EPRI found that electricity consumption could grow at an annual rate of 3.7% in a low growth scenario, or up to 15% annually in the highest growth scenario. 

Projections of potential electricity consumption by U.S. data centers, 2023 - 2030 (Image credit: EPRI)

That leaves data centers amounting to a much larger share of the country’s total electricity consumption. On the low end, data centers could contribute just under 5% of the nation’s total electricity consumption by 2030, or over 9% at the highest end.

But already, data center developers are struggling to access enough energy to fuel the new developments, much less clean energy. At a Latitude Media event earlier this month, John Belizaire, CEO of data center developer Soluna, said that energy access is now the “primary bottleneck for AI.” 

And EPRI found the same: “Connection lead times of one to two years, demands for highly reliable power, and requests for power from new, non-emitting generation sources can create local and regional electric supply challenges,” the report found.

Where is all that capacity? 

As of March, there were roughly 10,655 data centers in the world. Roughly half, or 5,381, were located in the United States. This already represents huge growth, especially in the U.S. In January 2021, roughly one third of the world’s 8,000 data centers were in the States. 

And hyperscale data centers — “capable of rapidly scaling up their operations to meet the vast computing needs of cloud giants like Amazon AWS, Google Cloud, and Microsoft Azure” — dominate the U.S. data center landscape. Despite emerging relatively recently, they (together with colocation centers that multiple businesses can rent out) make up roughly 60% to 70% of the U.S. data center load. 

Meanwhile, enterprise data centers owned and operated by single companies account for about 20-30% of the country’s total data center load.

Hyperscale and enterprise data center concentrations across the United States (Image credit: EPRI)

These centers are not distributed equally across the country. Currently, hyperscale facilities tend to be concentrated in Arizona, Illinois, Ohio, New York, Ohio, and — notably — Virginia; meanwhile, California, Colorado, and Florida dominate enterprise computing.  

Another recent report from the real estate services company JLL found that, of the country’s most popular markets for data centers, Virginia has the most megawatts under construction. And the area around Atlanta, Georgia, is poised for the most dramatic growth, multiplying its current capacity with the megawatts it has in the pipeline. That Atlanta growth is already prompting Georgia Power to build more gas plants, much to its customer Microsoft’s alarm.

Virginia’s dominance

In Virginia, data centers devoured a whopping 25.59% of the state’s total electricity consumption in 2023, or nearly 34 million MWh per year. That dwarfs all other states; the next-most was Texas, at nearly 22 million MWh per year (and just 4.59% of the state’s electricity consumption).   

That current inventory amounts to 2,060 megawatts, with 889 more under construction. Other leading hubs of data center activity tend to have hundreds, not thousands, of MW of capacity.   

Data center development in key U.S. regions (Image credit: EPRI)

Beyond the broader energy delivery challenges of having so many data centers clustered in one place, the report identified additional challenges — and opportunities — specific to the top states for data center growth. 

Virginia, EPRI found, is coping with transmission problems, as well as community pushback, regulatory scrutiny, and a “particularly concerning environmental impact.” 

That said, it has long been a popular place to build data centers because of both its proximity to federal government agencies, and what EPRI characterized as its “unparalleled network infrastructure.” 

“The geographic distribution of data centers is notably uneven, creating economic opportunity but also localized grid stress,” EPRI found, adding that in 2023, 15 states alone accounted for 80% of the national load from data centers.

Especially in these places, EPRI found that better collaboration between data center developers and electric companies can ease the process of this rapid expansion. 

It specifically recommended improving data centers’ operational efficiency and flexibility, cooperating via a “shared energy economy model for sustainable data centers,” and using better forecasting and modeling to more accurately map future point load growth.

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