Richmond, Virginia – Data center power is in high demand due to the increasing need for artificial intelligence. As data centers require constant and reliable power, the focus has shifted to ensuring grid reliability, leading many utilities to invest in natural gas-powered generation. The surge in demand is not just limited to data centers but also includes potential growth from electric vehicles, driving up the consumption of natural gas in the United States.

In the past four years, the number of data centers has doubled, with projections indicating that this number will double again by 2030. The growth is primarily attributed to artificial intelligence-powered tasks such as speech and image recognition, mapping, and generative AI. Notably, data centers are concentrated in a few states like Virginia, California, Texas, and Illinois, with the majority located in power markets like PJM and ERCOT.

Currently, data centers consume around 150 Terawatt hours per year, with expectations of this consumption potentially doubling by 2030. This rapid growth poses a significant challenge for the power grid, particularly in regions like ERCOT and PJM. While the projections seem high, even if half of the growth is fueled by natural gas, it would still require a substantial increase in natural gas demand.

Utilities like Dominion Energy in Virginia are gearing up to meet this growing demand, with projections indicating a significant increase in peak power demand driven by data centers. However, transitioning to renewable energy sources poses challenges due to regulatory mandates and technological limitations. As a result, natural gas-fired generation is likely to play a crucial role in meeting the power needs of data centers in the coming years.

In North and South Carolina, Duke Energy is also preparing for a surge in demand by planning to build new natural gas-powered plants. Similarly, Texas is addressing its power scarcity issues by investing in new gas-fired generation and grid modernization. Despite the push towards renewable energy, the intermittent nature of renewables and the slow pace of renewable infrastructure development necessitate the continued reliance on natural gas for reliable power generation.

The trajectory of data center power demand suggests that natural gas will not only remain stable but could also see significant growth in the coming years. With utilities acknowledging the importance of natural gas in meeting this demand, regulatory bodies and policymakers need to approve plans to ensure grid reliability and prevent potential energy shortages in the future.