- U.S. data center power use could triple by 2028, reaching up to 12% of national electricity
- Hotspots like Northern Virginia are seeing explosive growth
- Utilities are eyeing natural gas and nuclear power – including SMRs - but face delays amid hyperscaler expansion
A biblical tsunami of energy demand is sweeping across the globe and energy providers are fighting to keep their heads above water.
We’ve already noted that hyperscalers are poised to spend more than $315 billion on data center expansions, with more than 500 facilities in the known pipeline by Synergy Research Group’s tally. But we even as this project tide rises, energy providers are still scrambling to build boats.
The U.S. Department of Energy (DoE) noted in a December 2024 report that domestic data center energy use is set to jump from 176 terawatt hours (TWh) in 2023 to between 325 and 580 TWh in 2028. Put another way, that’s an expected leap from 4.4% of U.S. electricity consumption to 12% on the high end of the 2028 forecast.
“Assuming an average capacity utilization rate of 50%, this annual energy use range would translate to a total power demand for data centers between 74 and 132 GW,” the report states.
Growing global power demand
Boston Consulting Group noted in a recent research bulletin that the U.S. accounts for a majority of global data center energy demand. That’s not only because major hyperscalers are based in the country but also because the U.S. offers a favorable regulatory environment and access to both reliable connectivity and power.
The firm estimated that global data center power demand will hit just under 130 GW by 2028, with the U.S. accounting for 81 GW of that total. That would put the U.S. on the lower end of the DoE forecast.
Still, it noted power demand from the rest of the world (excluding China) is expected to increase from 24 GW in 2023 to 44 GW in 2028.
It’s important to point out, however, that both the DoE and Boston Consulting Group notes were released before hyperscalers announced plans to collectively spend $315 billion in 2025 expanding their data center footprints around the world. So the wave could be even bigger than expected.
Local data center demand snapshot
What does this flood look like on the local level?
Well, in Northern Virginia – one of the biggest data center hubs in the U.S. – energy provider NOVEC said in a report it had 3 GW worth of contracted data center electric capacity through 2023, which accounted for 65% of its electric demand. But that figure is about to explode.
NOVEC added there’s another 10 GW in the planning and construction stages. The Prince William Times reported that means that by 2035 data centers will account for 95% of NOVEC’s demand.
In its 2024 annual report, Dominion Energy – which works with NOVEC to serve Northern Virginia – said it ended the year with 40 GW worth of new data center capacity in various stages of contracting. Dominion said it was facing a “a record-setting need for power.”
“To meet growing demand in our service areas, we are pursuing an all-of-the above energy strategy that incorporates more of everything, from solar and wind to natural gas and advanced nuclear power — a total of nearly 33 GW of new power generation and storage over the next 15 years," the company stated.
The emergence of nuclear power
In addition to natural gas, nuclear power has emerged as a key contender to help power companies ride the wave. Indeed, Dominion stated it has secured extended operating licenses for several large nuclear facilities. It also put out an RFP to evaluate the feasibility of adding a small modular reactor (SMR) at one of these existing facilities to boost power output and has also partnered with Amazon to explore ways to advance SMR deployments in the state of Virginia.
GlobalData issued a fresh report this week noting that SMR deployments could help boost global nuclear power capacity from 395 GW in 2024 to 494 GW by 2035. But there are a few problems facing the tech in the U.S. market.
As of March, SMR tech company Nuscale – considered one of the more mature in the space – said it still had yet to close a deal with a large data center player in the country.
And more broadly speaking, Boston Consulting Group wrote last month that “recent efforts to build and commission nuclear power plants in countries such as China, South Korea, and the UAE have been completed far more quickly and efficiently than those in the US and Europe.”
It’s not clear that the current administration in the U.S. has enough focus to change that at the rapid pace hyperscalers need them to. Though President Trump initially appeared on board with nuclear energy expansions, he’s recently shifted his focus to coal.