Surge in U.S. power demand driven by data centers and EVs

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The demand for power in the United States is projected to increase significantly by about 300 terawatt-hours (TWh) by the end 2030, driven largely by the expansion of data centers and the rise of electric vehicles (EVs), according to a report by consultancy Rystad Energy. This surge in demand is comparable to the annual electricity consumption of Turkey.

For over a decade, U.S. electricity demand remained stable at approximately 4,000 TWh annually. However, recent years have seen an acceleration in demand due to the rapid development of data centers essential for generative artificial intelligence and the push towards electrifying various industries as part of government and corporate climate initiatives.

The combined expansion of traditional and AI data centers, along with chip foundries, will increase power demand cumulatively by 177 TWh from 2023 to 2030, reaching a total of 307 TWh.

Data centers represent a relatively modest portion of total electricity demand in the US. This marks a more than two-fold increase compared to 2023 levels, which stood at 130 TWh.

In 2023, electricity consumption in the transportation sector totaled 18.3 TWh. By 2030, this figure is projected to soar to 131 TWh, driven primarily by the expansion of battery electric vehicles (BEVs).

This anticipated rise in power load poses a potential challenge to the U.S. electrical grid, which has shown increasing vulnerability to shortfalls. The existing infrastructure may face significant stress due to this rapid growth in demand. However, Rystad Energy also predicts a substantial increase in renewable energy capacity, which could alleviate some of these concerns.

US power capacity installation

Rystad forecasts that there will be an addition of 237 gigawatts (GW) of solar capacity and 78 GW of wind capacity between 2023 and 2030. This expansion in renewable energy is expected to meet the growing power demand from data centers and EVs, thereby supporting the stability of the U.S. power grid.

“This growth is a race against time to expand power generation without overwhelming electricity systems to the point of stress,” stated Rystad analyst Surya Hendry. “If you envision cleaner roads and sustainable AI for the future, renewable energy is the key to meeting this demand and providing the scalability needed for U.S. power systems to endure.”

In addition to the power consumption by data centers and EVs, Rystad projects an extra 175 TWh of power demand from residential, commercial, and industrial sectors by 2030. This will bring the total U.S. electricity needs to nearly 4,500 TWh.

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