Interview, Webinar, Fireside Chat, Statement
Power surge: AI, renewable energy, and the future of electricity
- US power demand is projected to grow at a 2.5% CAGR by 2030, driven by a 160% rise in data center power demand relative to 2023 levels, which alone accounts for roughly 90 basis points of the total 2.4% growth.
- Approximately 50 gigawatts of new US power generation capacity will be required to support data center expansion, necessitating a mix of new natural gas, solar, and battery storage, with cumulative utility investment expected to rise 40% over the next four years compared to the preceding four-year period.
- Roughly $50 billion in generation-side investment is required based on current US cost assumptions, with regional utility investment plans in areas such as Georgia anticipated to be revised upward in 2025, 2026, and 2027.
- No incremental nuclear power plants are currently underwritten for construction by US investor-owned utilities, with small modular reactor innovations not anticipated until the 2030s, while technology companies pursue carbon mitigation through power purchase agreements, nuclear investments, and carbon capture.
- Significant bottlenecks are anticipated in the US power sector, including average permitting periods of four years for transmission projects, interconnection queues lasting 40 to 70 months, and equipment wait times for transformers and substations extending two to five years, potentially prolonging data center connection timelines beyond the standard two to three-year construction period.
- Europe is estimated to trail US power demand growth by three to five years, with a timeline shift potentially moving to a 2033–2035 plan, though demand could rise rapidly at low to mid-single-digit rates once constraints are resolved.
- The combination of data center demand and the RepowerEU electrification plan could drive a 40% to 50% increase in European power demand over the next decade, with RepowerEU alone expected to increase consumption by 30–35% upon completion.
- Europe requires approximately 800 billion euros for transmission and distribution investments over the coming ten years, with single-year CapEx expected to double by the end of the decade, alongside roughly 850 billion euros needed for renewable energy investments.
- Material constraints in Europe and electrified economies broadly include the availability of critical equipment and a projected shortage of copper required to connect new facilities.