Data center energy demand forecasted to soar nearly 300% through 2035

The future of data centers looks increasingly energy-hungry, as a recent report from BloombergNEF predicts that their electricity demand will surge nearly threefold over the next decade. By 2035, these facilities are expected to consume 106 gigawatts of power, a significant rise from the current 40 gigawatts. This growth is anticipated to occur predominantly in rural regions, driven by the expansion of data center sizes and the scarcity of available sites near urban areas. The scale of new data center projects is a key factor in this escalation. Currently, only about 10% of data centers utilize more than 50 megawatts of electricity. However, it is forecasted that the average new facility will require more than 100 megawatts. Notably, nearly one-quarter of these new centers will exceed 500 megawatts, with a select few surpassing the 1-gigawatt mark. Additionally, the overall utilization rate for data centers is projected to increase from 59% to 69%, largely due to the growing demands of AI training and inference, which will account for nearly 40% of total data center computing. The report underscores the rapid transformations occurring in the data center landscape, particularly as AI companies strive to build more advanced facilities. Global investments in data center infrastructure are estimated to reach $580 billion this year, surpassing expenditures on new oil supplies. This forecast marks a significant upward adjustment from earlier projections released in April, reflecting a notable increase in new projects announced since then. With an average lead time of seven years for new data center projects to become operational, early-stage developments have a substantial influence on long-term forecasts. The number of early-stage projects has more than doubled from early 2024 to early 2025, although these differ from projects currently under construction or already committed. Much of the future capacity expansion is set to take place in states such as Virginia, Pennsylvania, Ohio, Illinois, and New Jersey, all part of the PJM Interconnection—a regional organization responsible for managing the electric grid in those states and surrounding areas, including parts of Delaware, West Virginia, and North Carolina. Texas's Ercot grid is also expected to see a significant influx of new installations. As these developments unfold, the PJM Interconnection faces scrutiny from its independent monitor, Monitoring Analytics, which has raised concerns regarding the authority of PJM to permit new data center connections only when the grid has sufficient capacity. The monitor asserts that PJM must ensure reliable service and has the power to enforce a load queue for new large data center demands, emphasizing that current high electricity prices in the region are partly due to the impact of data centers. Monitoring Analytics argues that PJM's failure to clarify and enforce existing regulations is detrimental to maintaining both reliable and affordable service.