Electricity demand surges with data centers

Electricity demand surges with data centers

Electricity Surges

The U.S. commercial sector’s electricity consumption has recovered from pandemic levels, with annual sales to commercial customers in 2023 totaling 14 billion kilowatt-hours (BkWh), 1% more than in 2019. The growth is concentrated in states experiencing rapid development of large-scale computing facilities like data centers. Virginia and Texas saw the most significant increases, adding 14 BkWh and 13 BkWh, respectively, due to the expansion of data centers.

The states with the highest growth in commercial electricity demand saw a combined increase of 42 BkWh between 2019 and 2023, a 10% growth. In contrast, demand in the other forty states declined by 28 BkWh, a 3% decrease. Despite a consistent increase over time, commercial electricity consumption did decline in a few states between 2022 and 2023 due to mild summer weather.

Dominion Energy Virginia has played a key role in the state’s growth as it has become a major hub for data centers.

Electricity demand shifts with data centers

Electricity demand also surged in Texas, attracting data centers and cryptocurrency mining operations.

North Dakota experienced the fastest relative growth at 37% (up 2.6 BkWh) from 2019 to 2023, driven by similar factors. The EIA has revised its forecasts upward for commercial electricity demand through 2025, especially in regions with rapid data center development. The South Atlantic and West South Central census divisions are expected to see commercial electricity consumption increases of 5% and 2% in 2024 and 3% and 1% in 2025, respectively.

Other regions, such as the West North Central and Mountain census divisions, are projected to have annual growth averaging 3% in both 2024 and 2025. Nationally, EIA anticipates U.S. electricity sales to the commercial sector will grow by 3% in 2024 and 1% in 2025. Data center developments remain dynamic, and the EIA plans to update its forecasts as more information becomes available.

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