US data centers look to behind-the-meter power solutions to bridge the electricity infrastructure gap
Data centers are on track to significantly add to power demand in the US over the next 5 years. The amount of expansion alone by 2030 is equal to the current combined annual power consumption of New York and California. It’s the largest 5-year surge to the grid since the 1980s. That surge is especially notable when considered against the flat growth of electricity demand seen over the previous nearly two decades.
Data centers aren’t the sole drivers of this surge in electricity demand, but they’re the most significant near-term driver. They’re one of three converging forces, along with reshoring of advanced manufacturing and electrification. By 2030, total US electricity demand could grow by as much as 20 percent from 2025 levels.
The new crop of data centers have different power needs
The rise of artificial intelligence is changing the way data centers draw power, too. Traditional enterprise and cloud computing workloads tend to run at relatively stable utilization rates. Artificial intelligence has different modes with different power demand profiles; training, in which the AI is gathering knowledge and learning, and inference, in which the AI is using its knowledge to do a job. AI training clusters produce highly variable power load profiles with sharp ramps and dips at a megawatt scale and the workloads caused by inference fluctuate with user demand during the day. All data centers, whether running traditional enterprise or cloud computing or artificial intelligence require continuous, uninterrupted power availability.
Waiting for the power grid is costly
Adding the supply to meet so much electricity demand takes time. It can take 36 to 84 months for “power grid interconnection”. That timeline does not align with the typical data center build cycle of 12 to 24 months. Once constructed, operators can’t have the resources sitting idle.
In response, owners of hyperscale data centers are looking to other solutions, notably building their own “behind the meter” power supply and bypassing the power grid altogether, at least in the short term. These data center energy solutions aren’t a less expensive option, but they can close the time gap between construction and connection to the power grid.
To read more about the parallel energy system developing the US data center sector, including the mix of technologies deployed and the role of renewables, down the full paper.
Report Author
Amit Mathrani
Executive Director, Senior Energy Transition Specialist
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