Earnings Call, Interview, Conference Presentation
The Outlook for Data Center Power Demand as AI Token Use Grows
- U.S. electricity demand is projected to grow at a 3.5% Compound Annual Growth Rate (CAGR) through 2030, with specific U.S. data center power demand expected to reach approximately 108 gigawatts in 2030.
- Global data center power demand is forecast to rise 170% by 2030 from 2025 levels, adding power equivalent to the entire country of Japan over the seven-year period starting in 2024.
- Hyperscaler spending on AI infrastructure is anticipated to reach $1.2 trillion (net $1.7 trillion) in 2027 and increase to $2.1 trillion by 2029.
- PJM is expected to remain the dominant U.S. data center market through 2030 with a 35% share, followed by MISO at approximately 16% and ERCOT at 14%.
- The MISO market is forecast to overtake ERCOT, the Southeast, and the Pacific Northwest to become the second-largest U.S. data center market, driven by regulated utilities in Iowa, Wisconsin, and Louisiana.
- U.S. data center vacancy rates are projected to average 3% in 2030, while power shortages are not expected nationwide, though the PJM market is anticipated to become critically tight.
- ERCOT conditions are expected to tighten starting in the 2028 timeframe as demand ramps up, despite not currently being viewed as very tight.
- Natural gas is expected to meet approximately 60% of data center demand and renewables 40%, with behind-the-meter gas capacity reaching 30 gigawatts by 2030.
- Behind-the-meter gas solutions are considered a bridge strategy, while interconnect queue waiting times are projected to range from two to seven years depending on the regional grid.
- Capital investment for regulated utilities is expected to increase by 60% over the next five years compared to the prior period, with incremental growth funded 30% to 50% via equity.
- More than 300 regional or local data center moratoria are currently active, and nuclear contracting by hyperscalers is viewed as a long-term demand indicator with limited impact over the next five years.
- Monitoring state-level moratoria and 2030 capacity forecasts will determine if demand-side growth or regulatory constraints dominate, while industry coordination is expected to address community sentiment where nuclear plants are often preferred over data centers.