Data Centers, AI Infrastructure to Boost Electricity Sales by 175 Percent

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The growth in demand is centered in Texas, the District of Columbia, and 13 mid-Atlantic states.

Driven by new data centers and AI infrastructure, retail electricity sales to consumers across the United States are expected to grow at an annual rate of 2.2 percent in both 2025 and 2026.

This is a 175 percent jump compared to the 0.8 percent average growth during 2020โ€“2024, the Energy Information Administration (EIA) said in a July 31 analysis.

The Electric Reliability Council of Texas (ERCOT) serves 24 million customers in Texas, accounting for roughly 90 percent of the stateโ€™s electrical load, EIA said. PJM Interconnection serves the District of Columbia and 13 statesโ€”Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia.

โ€œAfter relatively little change in U.S. electricity demand between 2005 and 2020, retail sales of electricity have begun growing again, driven by rising demand in the commercial and industrial sectors,โ€ the EIA said.

โ€œDevelopers have proposed numerous data centers and large manufacturing facilities that could consume significant amounts of electricity, and many of these projects are concentrated in the ERCOT and PJM regions.โ€

For instance, the Trump-endorsed Stargate Project, backed by OpenAI, plans to invest $500 billion to build new AI infrastructure in Abilene, Texas. Meanwhile, Elon Musk is rapidly expanding xAIโ€™s $6 billion Colossus supercomputer in Tennessee.

On July 24, the Department of Energy said it has selected four sites to attract private investment to build AI data centers and energy generation projects, two of which are in PJM service areas.

The EIA said it was expecting electricity demand within the ERCOT region to grow by 7 percent and 14 percent in 2025 and 2026, respectively, โ€œwhen some large data centers and cryptocurrency mining facilities come online.โ€

In the PJM service region, electricity sales are projected to rise by 3 percent this year and 4 percent next year, the agency said.

By Naveen Athrappully

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