Researchers Examine How Expanding Data Centres Could Affect Electricity Demand and Energy Planning

LOS ANGELES, California, October 30, 2026  — The rapid growth of data centers throughout the nation has caused a significant shift in how electric utilities assess future electricity needs. Data centers are currently among the fastest-growing sources of electricity usage in the U.S., according to researchers and grid operators. This trend is causing a major reassessment of utility planning strategies, which historically assumed a stable level of demand.

A Dramatic Shift in Power Consumption

U.S. based data centers used about 176 TWh (terawatt-hours) of electrical power during 2023. This is significantly higher than the usage in 2013 which was only 58 TWh. It is estimated that data centers currently consume approximately 4% to 5% of the overall electric power used in the United States. Researchers with the Electric Power Research Institute estimate that this consumption will increase to approximately 9% to 17% by the year 2030 based on the rate at which new facilities are being constructed.

The electric load of a single large-scale data center may be anywhere from 100 to 1,000 MW, which is approximately the same as the electrical needs of 80,000 to 800,000 average residential customers. Therefore, when there are just a few additional large-scale data centers built within a region, it could result in a significant strain on the regional power grid. As of today, AI applications are estimated to represent 15-25% of all data center electricity usage, and this percentage is projected to increase substantially over the next several years.

Grid Planners Struggle to Keep Pace

The previous process used by utilities for planning was based upon an average growth rate of demand for many years. This process is now outdated because of the rapidity with which data centers are developing and the inability of utilities to keep up with the development of new sources of power generation and transmission. An analysis of the integrated resource plans indicated that 23 U.S. utilities updated their long-term plans during the first six months of 2018, primarily due to the increased demand for electricity from data centers.

As an alternative to relying on one single “most likely” projection, regional grid operators are now incorporating scenario ranges into their forecasting. This represents a dramatic change in the way that regional grid operators traditionally develop their forecasts. The largest regional grid operator in the country, PJM, which provides electricity to over 67 million customers, has been under a great deal of pressure regarding how they forecast the future demand for electricity generated by artificial intelligence (AI). It is expected that the next round of revised forecasts produced by PJM will reflect a more realistic, conservative view of the future demands for electricity generated by AI, as compared to the more extreme views that were previously reflected in PJM’s forecasts.

Regional Hotspots Face Mounting Pressure

The planning challenges for states with high levels of data center development (i.e., Virginia and Arizona) are among the most serious. Utilities in these areas have made commitments to provide electricity to meet the demand of more data centers in the future, which adds further pressure on their resources. A utility company in Pennsylvania developed a five-year capital expenditure program totaling $23 billion that was designed to support the increasing number of data center interconnection applications.

In some areas, electric companies are now offering different types of rates where developers will have to purchase a percentage of the power they requested from the utility, regardless of whether or not the developer actually uses the power. One example of this occurred in Ohio when regulators there approved a similar program earlier this year. According to reports, the approval of this program led to a decrease in new requests to connect to the electric system in Ohio. Both of these regulatory actions indicate concerns about how the use of electricity by data centers can increase costs to other customers.

Balancing Growth with Grid Reliability

The researchers say we need to do more than just forecast better, we also need to get more out of what we have with our current grid system and work together with utilities as developers. Many data center companies are looking at on-site generation and storage systems that would allow them to take off-grid when there is a high level of demand on the rest of the grid. This type of flexibility could help to close the gap in time frame from when you can build a data center to when you will have a new grid system up and running.

The International Energy Agency reported that in 2025 alone, the total amount of electricity used by data centers increased by 17%, with those that focused on AI growing at a faster rate than the overall category. Researchers predict that as this growth continues, the next few years will determine if the grid planning process, regulatory bodies, and developers can work together fast enough to provide reliable power. The outcome of how these processes are coordinated will have an impact on the cost and supply of electricity to homes throughout the United States.