
You have read that data centers are adding massive new demands to the American energy grid. At OilPrice.com, Haley Zaremba discusses America’s ability to adopt this “new normal” in demand given the challenges faced by the country’s energy production. She writes:
The United States power grid is under enormous stress. Ageing infrastructure coupled with rapidly changing supply and demand patterns are pushing the grid to its limits, threatening national energy security. All of this volatility is leading to price shocks and punishing electric bills for households across the country, with rising energy prices outpacing inflation.
The rapid rise of renewable energy and increased adoption of electric vehicles are changing the inflows and outflows of energy to the grid. Renewable energies such as solar and wind power are variable, meaning that their production levels depend on external and uncontrollable variables such as the weather, the seasons, and the time of day. This means that renewable energy production patterns are often exactly inverted from demand patterns – to oversimplify the situation: homes turn on the lights after the sun sets on solar panels. What is more, rooftop solar has complicated energy grid flows, as consumers are now sending excess energy back into the grid, making previously one-way flows more complex.
Increased electrification of the economy means that we will be relying on electrical grids for far more of our daily energy needs. There has been much hand-wringing over whether the grid will be able to keep up with an influx of residential energy demand for the purpose of charging electric vehicles. Experts ensure that the grid will be able to keep up with increased EV adoption, but concerns are well-founded – it will represent a definite challenge for infrastructure that is already old and under-funded.
In order to bring the grid up-to-speed for the emerging ‘new normal’ of the domestic energy landscape, the United States Department of Energy estimates that the country will need 47,300 gigawatt-miles of new power lines by 2035, representing a 57% expansion of the current grid. Meeting that target will necessitate a two-fold increase in today’s rate of construction.
And now there’s a whole new variable which is ramping up demand and will likely place even more pressure and urgency on ramping up domestic energy grids to record capacities – the runaway demand coming from data centers, in large part due to the proliferation of artificial intelligence. Thanks to the currently insufficient levels of grid infrastructure, data centers are already facing years-long bottlenecks for connecting to the grid in the United States. The Register reports that “utility companies in the US are being flooded with power delivery requests for sites marked for data center construction, but that they are unable to fulfill many of these until the 2030s.”
All of this presents a major challenge for United States electric utilities, which need to walk a tightrope in order to balance the delivery of affordable and reliable power while also maintaining and upgrading massive amounts of fixed infrastructure on a massive scale. As a result, U.S. energy prices are sharply on the rise, increasing about 5% annually – even higher than the already blistering rates of inflation. “While electricity generation costs have gone down thanks to technology like solar and wind, transmission and distribution costs have driven bills higher,” reports PV Magazine.
Action Line: Energy is the basis for the technological advancements that create progress. Just as important as artificial intelligence or electric vehicles is the power generated to make it work. Power generators and distributors will be as important to making the future work as chip manufacturers and battery producers. Click here to subscribe to my free monthly Survive & Thrive letter.
Read more about data centers and the future of power in America here:
- Data Centers Ramping Up Power Demand
- Will AI Data Centers Threaten National Security?
- How Will America Fill Its Data Center Power Gap?
- AI Data Centers Could Consume 25% of U.S. Power
- Texas Attracts Data Centers with Cheap Power and Land
- Amazon’s Nuclear Powered Data Center
- Can Data Heat Your Home for Free?