Grid Strategies: Hard numbers and projections of data center impacts on power loads
neillh...@earthlink.net
Five-Year Load Growth Up Six-Fold to 166 Gigawatts THE ERA OF FLAT POWER DEMAND IS BEHIND US … Electricity usage is forecast to grow by an average of 5.7% per year over the next five years, with peak demand growth forecast at 166 GW, a 3.7% annual rate. • Over the past three years, the 5-year forecast of utility peak load growth has increased by more than a factor of six, from 24 GW to 166 GW. • Electricity use is forecast to increase even more quickly than peak power demand. By 2030, forecasts indicate that total electricity use will increase by 32%. • The higher growth rate for electricity use likely reflects high load factors of data centers as well as forecast changes in off-peak energy use by other customers. Data centers are the largest driver of demand and energy growth, accounting for about 55% of demand growth in utility load forecasts over the next five years. • Even though smaller than data center growth, new load for industrial / manufacturing, oil & gas / mining, and other load types is large compared to recent decades. The data center portion of utility load forecasts is likely overstated by roughly 25 GW, based on a review of reports published by market analysts. • This discrepancy indicates that utility forecast practices need improvement to better reflect the probability of projects completing, their total loads, supply constraints, or timing of load growth.
AND FORECAST CONTINUES TO GROW ... 3 800 850 900 950 1,000 2025 2030 2030 Summer Peak Demand (GW) 5-year Nationwide Summer Peak Growth Aggregate of Forecasts Submitted to FERC in 2022-2025 2022: 24 GW 2023: 38 GW 2024: 64 GW 2025: 166 GW Post FERC 714 Adjustments: SPP: SPP, 2025 Integrated Transmission Planning Assessment Report, Draft v. 0.3 (October 6, 2025). The 166 GW forecast is equivalent to adding 15 times the peak load of New York City. Data Center Demand Driving Peak Load Growth DATA CENTERS DRIVE ABOUT 55% OF FORECAST GROWTH Of the 166 GW of forecast peak load growth, roughly 90 GW are linked to data centers. • Very few utility load forecasts differentiate data center types. While some break out crypto mining facility load, not enough do so to provide a useful national estimate for this subcategory. Notably, artificial intelligence (AI) load is not categorically tracked in any publicly available utility forecast. • However, data center market analysts indicate that data center growth is unlikely to require much more than 65 GW through 2030. Similar growth is shown in one proprietary database of data center projects. This suggests that either the timing or the magnitude of FERC-submitted load forecasts collectively overstate data center-driven load growth by about 40%. Industrial and manufacturing drives about 30 GW, with oil & gas and mining sectors contributing perhaps 10 GW more. • While utility load forecasts often provide detail for subsectors, these practices are not consistently applied. It is not feasible to provide further detail at the national level, nor can a breakdown for energy use be estimated. Other drivers, representing about 30 GW of growth, include general residential and commercial growth (building electrification), EV charging (transportation electrification), and other factors. • Many load forecasts had roughly zero growth for these other load types, while as much as half of some other forecasts were attributed to these factors collectively. • This analysis required professional judgement to interpret available data. Useful forecast differentiation was available (or inferred) for forecasts representing about 90% of national load.
Drivers of Load Growth (2025 – 2030) 4 Industrial / Manufacturing 30 GW | ~20% Other 30 GW ~20% Oil & Gas / Mining 10 GW | ~5% Data Centers 90 GW ~55% Six Regions Driving Load Growth Through 2030 While load growth is increasingly being forecast by most planning entities, six regions represent over 80% of projected five-year growth. Numbers indicate forecast five-year growth in summer peak. This helps explain why it is important to focus on load forecast practices in the regions CAISO, ERCOT, PJM, and SPP that make up the majority of load and load growth in the U.S. 5 A Scramble to Respond to Growing Energy Demand For over two decades, the power industry was in a low growth period, well below 1% per year. If current planning entity forecasts are correct, electricity usage will increase at an annual rate of 5.7% per year over the next five years, with peak demand increasing by 3.7% annually during that same period. While utility capital investment has grown steadily over the past decade, achieving this higher growth rate would require the electricity industry to plan and build new generation and transmission capacity at more than six times the rates seen in recent years. Expanding the grid is critical to meeting high load growth and enabling the development of strategic industries while maintaining reliability. Lack of sufficient transmission within and between regions will constrain the grid’s capacity to meet all forecast power demand. • According to FERC data, the U.S. built 888 miles of new 345-kV+ transmission last year. • This is a higher rate of build-out than in 2023, during which only 322 miles were constructed. • Both years fall far short of the ~5,000 miles/year of high-capacity regional transmission indicated as necessary by the DOE’s 2024 National Transmission Planning Study (which did not incorporate this load growth).
The 2025-2030 growth forecast may be an overestimate…or an underestimate. Utility forecasters are still adapting to surging large loads, and uncertainty remains high, making it difficult to agree on planning scenarios, finance manufacturing, and complete the construction of transmission and generation. Even conservative growth trajectories outpace recent years and would require substantial grid expansion to accommodate. Decade Average Annual Energy Use Growth 1950s – New Appliances 1960s – Air Conditioning 1970s 1980s 1990s 2000s – CFLs 2010s – LEDs '21-'24 '25-'30 – Data Centers 8.5% 7.4% 4.2% 3.0% 2.4% 0.8% 0.2% 0.9% 5.7% SOURCES | NERC, Table F 2024 Long-Term Reliability Assessment (December 2024), p. 31 and . Edison Electric Institute, 2024 Financial Review Supplemental (July 2025). Grid Strategies, Fewer New Miles: Strategic Industries Held Back by Slow Pace of Transmission, Rev. 1 (July 2025). U.S. Energy Information Administration, Monthly Energy Review Table 7.6 (Sept 2025).
Energy Use Growth Forecast is 50% Larger than Peak Load It isn’t just the scale of load growth that matters: The high-energy character of forecast load growth will change the way planners expect the grid to operate. • Energy use is forecast to grow at 5.7% annually over the next five years and peak load growth is forecast to grow at 3.7%. • The higher growth rate for energy can be measured as a 96% load factor for new energy and peak demand. A load factor is a ratio of average energy use to peak load. • Today, the US system operates at about an 60% load factor, up from 58% just three years ago and forecast to reach 66% in 2030. Likely drivers of this shift include data centers, growth in off-peak energy use, and problematic forecasting practices for large loads. • Data centers generally operate at an above-average load factor. For example, Dominion Virginia reported an 82% load factor for large data centers in 2024 and Duke Energy states that it plans for new large loads to have an 80% load factor. It appears that some large load forecasts may use higher values, perhaps as high as 100%, which is unrealistic. • Off-peak energy use can drive up the load factor for new energy and peak demand. For example, in NYISO, electrification of winter heating load is driving up energy use, but not the summer peak. This results in NYISO’s forecast for “new load” to have a load factor of 150%. A high load factor drives power supply planning to provide both capacity and energy. • New capacity is typically provided by battery storage or peaking gas-fueled generators. • New energy is typically provided by solar, wind or high-load-factor gas-fueled generators.
Energy Use is Growing Faster than Peak Load 15% 10% 5% Forecast Energy Use Growth Rate 0% ERCOT SPP U.S. PJM Southeast NYISO 0% 5% 10% 15% Forecast Peak Load Growth Rate SOURCES | Dominion Virginia, Response to PEC Question 1-15 (June 2025). Duke Energy, 2025 Carolinas Resource Plan (October 2025), Appendix D. 7 Demand Growth Now Mainly Driven by Data Centers For the past three years, load growth forecasts have grown at an exponential rate. In 2022 and 2023, manufacturing and electrification shared the stage with data centers. But load growth forecasts for 2025 are now dominated – at least in the near term – by data centers. Both for the national economy and for the power industry in particular, there is a pressing need to understand the pace and scale of data center buildout. In just four years, the five-year forecast for electric power demand growth has increased by a factor of six. If the load forecasts are correct – and this is by no means assured – then by 2030, new demand will represent over 15% of total national electricity use. Some smaller utilities are projecting demand to double. This rate of growth has so many implications, it is impossible to list them here. But for starters, the power industry must grapple with: •
Generation mix – Development of new generation requires planning for meeting both energy and demand – not just peaking resources. • Uncertainty – Will the data center industry boom as forecast? Or will growth be tempered by financial, technological, economic or other forces? • Supply chain – Even before the data center boom, the power industry was grappling with long delays in key transmission and other grid equipment deliveries. Now gas power plants are backlogged. Tariffs are raising costs for transmission and generation equipment. Alleviating dependency on offshore manufacturers by expanding domestic manufacturing may be slowing due to cuts to federal support contracts and programs. • Delays in selecting and permitting new transmission projects – Transmission projects are essential not only to connecting new customer loads, but to provide the least-cost resource solution to meet demand in every region of the grid. Changes in policy and practice, such as permitting reform, are required to make this possible.