The North American electric industry is entering what some call the “Roaring Twenties,” with electricity demand growing at an unprecedented pace. After years of stagnation, peak demand and energy growth forecasts are soaring, driven by massive new manufacturing initiatives, the explosion of data centers, and the burgeoning cryptocurrency mining industry.

This surge in demand presents both opportunities and challenges for utilities, grid planners, and policymakers. It demands swift adaptation, from accelerating resource deployment to managing large loads through innovative strategies.

 

Electricity demand is accelerating at rates not seen in decades. In its December 2024 long-term reliability assessment, the North American Electric Reliability Corporation forecasts summer peak demand to rise by 132 GW and winter peak demand by 149 GW over the next 10 years. This peak demand is projected to be accompanied by a significant increase in energy (TWh) demand as well.[1]

The main drivers behind this demand spike include: 

1. Domestic Manufacturing: Federal incentives, like the CHIPS and Science Act and Inflation Reduction Act, are fueling a manufacturing boom, particularly in semiconductors, electric vehicles, and clean energy technologies.
2. Data Centers: Although estimates vary, U.S. data centers power demand could grow by as much as 65 GW by 2029, with AI development playing an increasing role in demand.
3. Cryptocurrency Mining: Following China’s 2021 cryptocurrency mining ban, operations have proliferated in the United States, where miners seek low-cost energy sources and often provide grid flexibility.

These large loads far exceed the demand growth attributed to electric vehicles and other electrification measures, challenging utilities to quickly adapt.

Booming Domestic Manufacturing

The federal push for domestic manufacturing has driven monthly construction spending on manufacturing to nearly triple since 2020. Investment announcements in this sector include: [3]

• Semiconductors and Electronics: $446 billion
• Electric Vehicles and Batteries: $182 billion
• Clean Energy: $188 billion

For utilities, this growth requires adjusting demand forecasts, which often exceed historical experience, to ensure grid reliability while accommodating these large-scale developments.

Challenges of Data Center Expansion

Data centers represent a unique challenge with their concentrated demand surges in specific regions. For example:

• Dominion Energy serves Loudoun County, Virginia, the largest global data center market, and connected data center capacity in Virginia has reached an estimated total of more than 5 GW. [4] In their latest integrated resource plan, Dominion Energy forecasts power demand to double by 2039. [5]
• Georgia Power currently has 34.6 GW of large economic development loads requesting service. Nearly 90% of this load comes from data centers, including five requests of 1 GW or more. [6]

AI model training and inference processes are particularly energy-intensive, consuming significantly more power than traditional servers. Utilities are adapting by expanding generation capacity and developing innovative cooling technologies, with the Department of Energy investing $40 million in high-performance, energy-efficient solutions.

Cryptocurrency Mining: Flexible but Energy-Intensive

Cryptocurrency mining now represents an estimated 0.6% to 2.3% of annual U.S. electricity consumption. [7] Many miners seek low-cost electricity by locating near underutilized power plants or directly connecting to generation sources.

Despite their high energy use, mining operations can provide valuable grid services by acting as flexible loads. For instance, Riot, a Texas-based miner, participates in demand response programs, earning power credits and reducing costs while contributing to grid reliability.

Policy mechanisms are emerging to manage the growth of mining operations. For example, New York has imposed a temporary moratorium on proof-of-work mining projects requiring environmental assessments.

Utilities and independent power producers are responding to the surge in demand by revising plans and rapidly deploying resources. Key actions include:
 

• Resource Expansion: For example, Arizona Public Service aims to add solar and wind power with storage, while Duke Energy is expanding natural gas and offshore wind capacity.
• Flexible Operations: Encouraging large loads to operate flexibly can maintain grid reliability, as exemplified by cryptocurrency miners and hyperscale data centers.
• Policy Adjustments: States are exploring measures like suspending tax incentives for data centers and supporting energy-efficient technologies.

The rapid emergence of large loads is reshaping the electric industry. While the growth presents operational and reliability challenges, it also signals a revitalized demand landscape after years of stagnation. Utilities must adapt by expanding capacity, fostering flexible load operations, and embracing innovative solutions.

In doing so, the industry has an opportunity to balance economic growth with sustainability, ensuring a reliable and resilient energy future.

[1] NERC, 2024 Long-Term Reliability Assessment (Dec. 2024), at p. 31

[2] GridStrategies, Strategic Industries Surging: Driving U.S. Power Demand (Dec. 2024), at p. 10

[3] Investing in America, accessed December 20, 2024, at (archived webpage available at https://web.archive.org/web/20241220235640/https://www.whitehouse.gov/invest/)”

[4] Joint Legislative Audit and Review Comm’n, Data Centers in Virginia 2024 (Dec. 9, 2024), at p. 9

[5] Utility Dive, Dominion unveils plans to add 21 GW of clean energy, 5.9 GW of gas generation by 2039 (October 16, 2024)

[6] Georgia Public Service Commission Docket #55378, Georgia Power Company – Large Load Economic Development Report for Q3 2024 (November 18, 2024)

[7] EIA, Tracking electricity consumption from U.S. cryptocurrency mining operations (February 1, 2024)