Energy Demand for Data Centers Expected to Skyrocket by 300% by 2035
A recent report from BloombergNEF reveals that energy demands from data centers are set to escalate dramatically, with projections indicating a surge to approximately 106 gigawatts by 2035—an increase from the current usage of 40 gigawatts. This anticipated growth, nearly triple the existing demand, underscores the trend of expanding data center construction, particularly in rural regions as urban sites become increasingly limited.
Factors driving this surge include the size and capacity of the facilities. Presently, only 10% of data centers consume over 50 megawatts of electricity; however, new developments are expected to average more than 100 megawatts each. Notably, around 25% of these centers will exceed 500 megawatts, and a select few may surpass 1 gigawatt.
The report also highlights an increase in utilization rates, rising from 59% to 69% as AI training and inference operations account for nearly 40% of total data center compute power. This trend correlates with a broader investment boom in data center infrastructure, which is projected to reach $580 billion this year—surpassing global expenditures on oil production.
These findings indicate a significant shift in the industry, marking an upward revision from earlier estimates. The report notes that recent announcements of new projects have rapidly altered forecasts, given that the average project development timeline spans seven years.
Key states anticipating substantial new data center capacity include Virginia, Pennsylvania, Ohio, Illinois, and New Jersey. These areas fall within the PJM Interconnection, a regional transmission organization responsible for managing the electrical grid in several states, including parts of Kentucky and North Carolina. Texas’s Ercot grid will also experience notable expansions.
Amidst these developments, the PJM Interconnection faces scrutiny from its independent monitor, Monitoring Analytics, which has filed a complaint with the Federal Energy Regulatory Commission (FERC). The complaint argues that PJM should only authorize new data center connections when there is sufficient capacity within the grid, emphasizing the organization’s commitment to maintaining reliability and affordable service.
As the demand for electricity soars, concerns about the effects of data centers on current electricity prices in the region have also been raised. Monitoring Analytics criticized PJM for not adequately enforcing its existing rules, labeling their inaction as unjust and unreasonable.
