U.S. electric utilities predict a tidal wave of new demand from data centres powering technology like generative AI, with some power companies projecting electricity sales growth several times higher than estimates just months earlier.
In 2023, the country’s electric utility shares fell by more than 10 per cent, the largest yearly drop since 2008, as rising inflation pushed investors to chase higher yields. The companies, which suffered a prolonged demand lull after the introduction of new energy efficiencies at the start of the millennium, are up about 4 per cent so far this year.
Longer term power demand from IT equipment in U.S. data centres is expected to reach more than 50 gigawatts by 2030, up from 21 GW in 2023, according to consulting firm McKinsey’s latest estimates. Last year, it had forecasted demand rising to over 35 GW by 2030. Florida-based NextEra Energy, the world’s largest renewable energy company, said it had of data centres in its project queue that would use more than three GW, or nearly enough to power all homes in the state of Minnesota.
“What we’re seeing in the market is that these projects are not coming online fast enough to meet the local demand for the for the data centres,” said Rystad Energy analyst Geoff Hebertson.