Data center electricity consumption is poised for explosive growth, with demand projected to nearly triple by 2035. A recent BloombergNEF report reveals that these facilities will require 106 gigawatts of power by then, a sharp increase from the current 40 gigawatts. This surge is driven by the relentless expansion of AI, larger facility sizes, and a shift towards more rural locations.
The Scale of Expansion: A Dramatic Upswing
The growth isn’t incremental. Planned data center projects are now averaging well over 100 megawatts each – a substantial leap from the 50 megawatts typical today. The largest facilities will exceed 500 megawatts, with a few even surpassing 1 gigawatt. This escalating scale is fueled by the AI boom, which is expected to account for nearly 40% of total data center compute by 2035.
Why This Matters: The Energy Implications
This rapid expansion carries significant energy implications. The $580 billion in global investment for data centers this year outpaces spending on new oil supplies, underscoring the sector’s growing dominance in energy demand. The trend isn’t just about quantity; it’s also about efficiency. Data center utilization rates are expected to climb from 59% to 69%, meaning existing infrastructure will be pushed harder.
Grid Strain and Regulatory Scrutiny
The heaviest concentration of new capacity is planned for states within the PJM Interconnection region: Virginia, Pennsylvania, Ohio, Illinois, and New Jersey. This puts a strain on the electrical grid, prompting scrutiny from its independent monitor, Monitoring Analytics. The group filed a complaint with the Federal Energy Regulatory Commission (FERC), arguing that PJM has the authority to regulate new data center connections to ensure grid reliability.
The core of the issue is that PJM can, and should, enforce rules that prevent overloads. Data centers are already contributing to high electricity prices in the region, and uncontrolled growth could destabilize the system. The dispute highlights a growing tension between rapid expansion and the need for sustainable infrastructure.
A Rapidly Evolving Forecast
The latest BloombergNEF report represents a significant revision upwards from earlier projections. The surge in announced projects since early 2024 has accelerated the timeline, with early-stage developments more than doubling in that period. This underscores the speed at which the landscape is changing, emphasizing the urgency of addressing grid capacity and regulatory oversight.
The implications are clear: data centers will dominate energy demand in the coming decade, and proactive grid management is essential to prevent instability.
