Why are data centers increasing electricity prices?

The significant electricity demands of data centers, especially for supporting generative artificial intelligence, are driving up energy costs on congested power grids.

How much electricity might data centers use in the future?

Estimates suggest that by 2028, data centers could consume between 6.7% and 12% of the U.S.'s electricity production.

Are data centers starting to manage their power usage?

Yes, AI data center developers are increasingly willing to consider demand response programs to manage their power consumption during peak grid times.

Home / Technology / AI's Thirst for Power Sparks Energy Price Hikes

AI's Thirst for Power Sparks Energy Price Hikes

5 Feb

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Summary

Data centers' AI power needs are driving up electricity prices.
US data centers may consume 12% of electricity by 2028.
AI data centers are now considering demand response programs.

AI's Thirst for Power Sparks Energy Price Hikes

The escalating power demands of data centers, fueled by the artificial intelligence boom, are significantly contributing to rising electricity prices on congested power grids. Projections from the Lawrence Berkeley National Lab indicate that data centers' share of U.S. electricity consumption could surge from 4.4% in 2023 to between 6.7% and 12% by 2028. This increased demand places a substantial burden on energy infrastructure, prompting public concern over inflated household energy costs and environmental impacts.

Historically, utilities have utilized demand response programs, encouraging large consumers to reduce power usage during peak times. While previously uncertain, data center developers are now increasingly engaging with these programs. Companies like Google have established agreements to shift non-urgent machine learning workloads, and new firms are emerging to assist data centers in managing their power consumption through workload shifting and on-site battery storage, particularly during periods of grid strain.