An alarming power crisis is hovering over a vast area of America. The Washington Post has reported a staggering rise in electricity demands due to the expansion of data centers and technology factories.
Industrial electricity demand in Georgia is hitting record highs, with predictions suggesting it will rise seventeenfold over the next decade. In Northern Virginia, the demand for new data centers might require the construction of multiple large nuclear power plants. Texas faces similar challenges.
As demand surges, factories and companies have been advised to build their own power plants. Georgia Public Service Commission Chair Jason Shaw expressed astonishment over the situation, acknowledging a challenge like never before.
The power demand spike is largely fueled by innovations in Artificial Intelligence (AI). Expanding computing infrastructures consume more electricity than traditional data centers. Tech giants like Amazon, Apple, Google, Meta, and Microsoft are scouring new locations for data centers. Additionally, power stations are under pressure due to the construction of new centers for crypto mining.
The scenario is rapidly deteriorating, with regulators concerned about the potential rise in electricity costs, likely affecting families directly.
According to the International Energy Agency, more than 2,700 U.S. data centers consumed 4% of the total electricity in 2022. This figure is expected to reach 6% by 2026. Data centers are becoming major power consumers.
The Washington Post highlights the brisk growth in the number of U.S. data centers, projected to exceed 100,000 by 2035. This growth has sparked a land battle. While companies initially established data centers in areas with robust internet infrastructure, they are now gravitating towards locations with power stations to avoid electricity shortages.
Andy Quengros, Managing Director at real estate firm JLL, told the publication that power companies are bewildered by the surge. Land prices are skyrocketing, with Columbus land values quadrupling and Chicago land prices tripling in some areas.
These developments come at a time when the government is encouraging a shift from fossil fuels to electricity, with delays in shuttering coal-fired power plants in Kansas, Nebraska, Wisconsin, and South Carolina due to escalating electricity consumption.
