AI data centers drive explosive electricity growth

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It's true to say that data centers are increasing power demand in the US, but that might be an understatement.

Growing demand for powering cloud computing and artificial intelligence has played a big part in explosive demand forecasts.

We expect data center capacity to increase by 59 GW by 2029. US data center power demand hit 46 GW in the third quarter of last year. 

So this forecast shows power demand doubling in just five years.

Texas and Virginia lead by a significant margin in terms of projected rising utility demand from these data centers.

The governor of Virginia just called for the world's first utility-scale nuclear generator to address this.

We're wrapping up the CERAWeek by S&P Global conference here in Houston, and predictably, data centers have been one of the hottest topics this week.

Panelists pointed to a recent report that says the US needs to add 100 GW to the grid every year.

We heard concerns over the immense amount of demand coming down the line from these data centers, and the question was asked: "Will AI break the US power grid?"

Despite it all, panelists said no.

The CEO of Constellation said we are approaching issues with stressed grids during peak hours, but he said a lot of the time, a third of generation sources are sitting on the sidelines and not being operated.

To put it bluntly, there's a lot of system slack going on.

He admitted the industry was caught flat-footed by AI, but he said the pace of it all is slowing down and hyperscalers are rationalizing their needs.

So while the challenge isn't considered to be existential, we do have a long and winding road ahead of us.