Yet data centers across the United States are consuming electricity at an unprecedented pace. This latest boom has many consumers and policymakers up in arms. These facilities, together with distributed solar, currently represent about 4% of the nation’s overall electricity generation. This cargo volume has more than doubled since 2018. It underscores our growing dependence on data centers to power the booming online world.
According to EIA projections, this trend will only continue. By 2028, data centers are on track to more than double their electricity use. In total, they could represent as much as 12% of U.S. electricity use. This worrisome projection comes at a time when the national electricity demand is flat-lining. Residential usage in all categories combined has increased by just 0.7% per year over the last ten years. Commercial electricity users—like data centers—have more than doubled their electricity consumption. Yet they have intensified their use at a remarkable annual clip of 2.6% over the last five years.
The change in patterns of electricity consumption has alarmed the people. According to a recent Consumer Reports survey, about four in five consumers are worried about increasing energy demands from data centers. They are afraid it will greatly increase their utility costs. As these facilities continue to expand, they will increasingly drive down energy costs for local communities. Residential users stand to be hit by this effect most severely.
Data centers are consuming record amounts of electricity. Industrial users have contributed to increasing demand, with a 2.1% annual increase in electricity consumption the last five years. Demand for energy is skyrocketing throughout the commercial and industrial sectors. Residential electricity consumption has hit a ceiling.
One possible avenue to avoid the increased energy impacts of data centers is using renewable energy sources. In many cases, solar farms, for instance, can start feeding power to new data centers before they’ve opened their doors. Building a new solar farm generally takes between 12 and 18 months. This timeline is rarely aligned with the immediate needs of data centers that are growing at a breakneck pace.
Manufacturers are still coming to terms with skyrocketing demand. On top of that, they’re experiencing catastrophic delays in the delivery of equipment with some lead times extending as long as seven years. This multiyear timeline for new production capacity may do little to mitigate the current supply and demand imbalance. Natural gas power plants add to this predicament, on average taking around four years to build, making the situation even worse.
The EIA is projecting that electricity generators would ramp up their use by 20% from 2019-2024. At the same time, US exporters increased their domestic natural gas use by an incredible 140% over that same period. These statistics underscore the pressing need for a comprehensive approach to energy management as various sectors compete for limited resources.