Power demand from US data centers will double by 2030, per the IEA
Coal and natural gas will still meet the majority of the increasing electricity demand going forward.
According to a report from the International Energy Agency published last week, electricity demand from data centers is forecast to double by the end of the decade, as Big Tech goes even bigger on AI ambitions and infrastructure spending.
The power surge is particularly pronounced across the US, which is responsible for nearly half of the unprecedented electricity demand. That all trickles down to driving demand for fossil fuel plants even further, with natural gas currently supplying 40% of data center electricity demand in the US. According to the latest projections, that’s unlikely to change anytime soon.
Power plays
With a greater demand for gas-powered energy generation, some Big Oil producers, like Exxon and Chevron, are eyeing opportunities to design plants with the sole purpose of supplying AI data centers directly. Meanwhile, companies like Meta and Microsoft are making moves to pivot to nuclear energy. However, some of the proposed agreements are years off, with many expected to start commissioning after 2030, per the IEA report.
Of course, many of the mega-investment plans were drawn up before tariff uncertainty started squeezing the world of business and Big Tech. Proposed levies on key components and equipment, manufactured in tariff-struck countries like China, could seriously impact tech giants’ plans to spend hundreds of billions on huge data centers moving forward. Microsoft reportedly delayed and canceled projects across the world even before the latest tariffs were announced.
