Data center energy consumption is projected to surge by almost 300% by 2035

Data Center Expansion Set to Dramatically Increase Power Consumption

According to a recent BloombergNEF analysis, the pace of data center development is accelerating, with upcoming facilities projected to require nearly three times the current electricity usage of the sector within the next ten years.

By 2035, data centers are expected to consume 106 gigawatts of power, a significant jump from the present 40 gigawatts. Much of this expansion will take place in less populated regions, as larger facilities are constructed and available sites near cities become increasingly limited.

A major factor behind this surge is the increasing size of planned data centers. While only 10% of existing centers currently use more than 50 megawatts, the average new facility in the coming decade is anticipated to exceed 100 megawatts. The largest projects are especially notable: almost 25% will surpass 500 megawatts, with some even projected to go beyond 1 gigawatt.

Planned data centers are significantly larger than those currently in operation

Image Credits: BloombergNEF

Simultaneously, overall data center utilization rates are forecasted to rise from 59% to 69%, as artificial intelligence workloads—both training and inference—are expected to account for nearly 40% of total computing resources.

These findings align with the ongoing trend of AI companies rapidly expanding their infrastructure, pushing global investment in data centers to $580 billion this year—surpassing the amount spent on new oil exploration.

However, the latest report highlights just how swiftly the industry is evolving. The projections represent a significant upward revision from BloombergNEF’s previous estimates in April, fueled by a wave of newly announced projects. The report notes that, with most projects taking around seven years to become operational, early-stage developments have a major impact on long-term forecasts.

Between early 2024 and early 2025, the number of early-stage projects has more than doubled, though these are separate from those already under construction or fully committed.

Regional Growth and Grid Challenges

Much of the planned capacity is concentrated in states such as Virginia, Pennsylvania, Ohio, Illinois, and New Jersey. These states are part of the PJM Interconnection, a regional transmission organization responsible for managing the power grid across several states, including Delaware, West Virginia, and portions of Kentucky and North Carolina. Texas, under the Ercot grid, is also poised for substantial growth in data center capacity.

The report comes at a time when PJM Interconnection is facing scrutiny from its independent monitor, Monitoring Analytics. The group has filed a complaint with the Federal Energy Regulatory Commission (FERC), asserting that PJM should only approve new data center connections if the grid can reliably support the additional load.

Monitoring Analytics emphasized, “To ensure grid reliability, PJM has the authority to require that large new data center loads wait until the system can accommodate them safely. PJM can establish a queue for such loads.”

Additionally, the organization pointed out that data centers are a key driver of elevated electricity prices in the region.

“PJM’s lack of enforcement and clarity regarding its existing rules, as well as its failure to safeguard reliable and affordable service, is both unjust and unreasonable,” the complaint stated.