US electricity consumption in 2025 is projected to exceed 4,200 TWh for the first time, according to recent analysis from Rystad Energy. Data centres are driving this growth, with capacity reaching 22 GW at the end of 2023, representing nearly 40% of global demand. Looking ahead, an additional 60 GW of capacity is anticipated in the US by 2035 (based on new data centre project announcements). Power use from these facilities is expected to rise from 130 TWh in 2023 to up to 450 TWh.  

The US is capitalising on low-cost energy, tax incentives and robust fibre-optic infrastructure to lead the global market for data centre developments, reports the market analyst, in particular in Virginia and Texas. Virginia’s so-called ‘Data Center Alley’ benefits from the state’s advanced infrastructure and tax incentives, while Texas offers favourable grid policies and abundant renewable energy resources, Rystad notes.

The electricity expected to power these new facilities is not necessarily carbon-free, however. With growing US electricity demand, natural gas has regained prominence as a reliable energy source. Utility companies are planning 17.5 GW of new capacity in the coming years – the highest level of project activity since 2017, according to Rystad data. ‘This resource plays a key role in ensuring the reliability needed for energy-intensive data centres,’ it says. ‘Yet, the sector faces hurdles, particularly with ageing transmission infrastructure struggling to support growing demand and integrate new projects.’

Last week, President Joe Biden issued an Executive Order to alleviate certain bottlenecks and expedite data centre and clean power infrastructure permitting and buildout on federal land. The order requires the Secretary of Defense and Secretary of Energy to each identify at least three federal sites by the end of February 2025, where data centres and associated clean power facilities can be built.

Rystad Energy reports there is ‘strong bipartisan support for the general concept of making federal land more accessible to the growth-oriented data centre sector’. However, it notes that: ‘Strict clean power requirements that allow natural gas to qualify only with a carbon capture rate above 90% are unlikely to be popular with the incoming Donald Trump administration.

On the renewables front, Rystad forecasts that the power generation sector will experience a ‘modest slowdown’ after a record-setting 2024 that saw 33 GWac of new capacity of solar photovoltaic (PV) added, based on preliminary data. Growth is expected to plateau this year, with advanced-stage projects totalling 33.5 GWac. Meanwhile, energy storage continues to thrive, according to the market analyst, with battery installations growing 50% in 2024 to reach 32.5 GWh. This is predicted to rise another 35% this year, ‘driven by larger and more standardised systems’.

For consumers, these developments come with financial implications, notes Rystad. Residential electricity prices averaged $165/MWh last year, a 25% increase from 2020. ‘Elevated transmission and distribution costs, despite declining wholesale natural gas prices, are expected to keep electricity bills high for the foreseeable future,’ it says.

Artem Abramov, Head of New Energies Research, Rystad Energy, concludes: ‘The US power sector is entering a critical growth phase. Meeting the demands of data centres while balancing investments in natural gas and renewables will shape the industry’s path forward. Without targeted action, rising costs and energy shortages could pose significant challenges for both consumers and industry.’  

UK government sets out blueprint to ‘turbocharge’ AI

Meanwhile, the UK government has outlined a national artificial intelligence (AI) technology development plan.  

The AI Opportunities Action Plan proposes some 50 recommendations, including ‘AI Growth Zones’ to speed up planning proposals and build more AI infrastructure, the first of which will be located in Culham, Oxfordshire. The plan will also see an AI Energy Council established to support investment in renewable energy for tech infrastructure. In addition, it is planned to increase public computing capacity 20-fold, with work starting immediately on a brand-new supercomputer.

Given the high energy demands of data centres, as already being experienced in the US, there is concern that the AI push could challenge the UK’s green energy goals. However, the government says it plans to advance AI while ‘ensuring sustainability’, and is exploring energy solutions such as small modular reactors to ensure that AI’s growth contributes to, rather than detracts from, the UK’s clean energy ambitions.

The AI Opportunities Action Plan is said to be linked to an upcoming Digital and Technology Sector Plan, to be published in the coming months. 

In other news, US research lab NREL and Intel have developed A Beginner’s Guide to Power and Energy Measurement and Estimation, aiming to equip developers with the skills they need to conduct productive energy measurement in their computing. The report offers a roadmap for determining computing’s energy usage from both hardware and software perspectives. and discusses the challenges of interpreting these measurements as useful estimates.

Click here for a round-up of the potential impact of AI on data centre utilisation.