Data Center Energy Demand Set to Triple by 2035: A Looming Challenge
The rapid expansion of data centers is poised to significantly impact global energy consumption. A recent BloombergNEF report projects that by 2035, data centers will require 106 gigawatts (GW) of electricity, a substantial increase from the current 40 GW. This nearly 300% surge underscores the escalating energy demands of the digital infrastructure.
Growth Drivers and Geographic Shifts
Several factors contribute to this anticipated growth. The increasing scale of data centers is a primary driver. Currently, only 10% of data centers consume more than 50 megawatts (MW) of electricity. However, projections indicate that future facilities will average over 100 MW, with nearly 25% exceeding 500 MW and some surpassing 1 GW. This trend reflects the industry’s move towards larger, more energy-intensive operations.
Geographically, the expansion is shifting towards rural areas. As urban sites become scarce, states like Virginia, Pennsylvania, Ohio, Illinois, and New Jersey are emerging as key locations for new data center developments. These regions fall within the PJM Interconnection, a regional transmission organization responsible for managing the electrical grid across multiple states.
Impact of Artificial Intelligence
The rise of artificial intelligence (AI) is significantly influencing data center energy consumption. AI training and inference tasks are expected to account for nearly 40% of total data center computing by 2035. Consequently, data center utilization rates are projected to increase from 59% to 69%, indicating more intensive use of existing infrastructure.
Investment Trends and Industry Response
The burgeoning demand has led to unprecedented investments in data center infrastructure. In 2025 alone, global investments in data centers reached $580 billion, surpassing expenditures in oil exploration. This surge reflects the critical role data centers play in supporting digital services and the growing reliance on cloud computing.
However, this rapid growth presents challenges. The PJM Interconnection’s independent monitor, Monitoring Analytics, has raised concerns about the grid’s capacity to accommodate new data center connections. The organization emphasizes the need for PJM to ensure that the grid can reliably support these additions, suggesting the creation of a load queue to manage new demands effectively.
Potential Solutions and Future Outlook
To address the escalating energy requirements, the industry is exploring innovative solutions. Advanced geothermal power, for instance, could supply nearly two-thirds of new data center demand by 2030. This approach involves quadrupling the U.S. geothermal power capacity from 4 GW to approximately 16 GW, offering a sustainable and cost-effective energy source for data centers.
Additionally, companies like Veir, backed by Microsoft, are developing superconducting electrical cables designed for data centers. These cables aim to handle higher power loads efficiently, addressing the challenges posed by increasing energy demands.
Despite these efforts, the path forward requires careful planning and collaboration between data center operators, energy providers, and regulatory bodies. Balancing the growth of digital infrastructure with sustainable energy practices is essential to prevent potential grid overloads and ensure a reliable power supply.
In conclusion, the projected tripling of data center energy demand by 2035 highlights the need for strategic investments in energy infrastructure and the adoption of innovative technologies. As the digital economy continues to expand, proactive measures are crucial to meet energy demands sustainably and maintain grid stability.
