According to a Wood Mackenzie report, data centers developed since 2023 exceeded 92 GW of capacity at the end of 2024.
The increasing electricity demand in the U.S. is attributed to the growing number of data centers coming online. According to the report “US data center pipeline” from Wood Mackenzie, data centers developed since 2023 exceeded 92 GW of capacity at the end of 2024.
In a pv magazine article, Gerard Reid considers that in “the next industrial revolution,” the rapid adoption of artificial intelligence (AI) is driving demand for data centers. Subsequently, data center operation is driving heightened demand for electricity. Reid saidthat the combination of clean electricity and AI will bring what he calls an “era of electrification intelligence.”
According to the Wood Mackenzie report, monthly data center additions reached 7 GW in the fourth quarter of 2024, representing high load demand.
“Coming into 2023, we saw only 5 GW of pipeline capacity,” said Ben Hertz-Shargel, Global head of grid edge for Wood Mackenzie. “Monthly growth has been linear—not exponential as is sometimes assumed—but has exceeded 7 GW and continues to climb at a rate of 227 megawatts (MW) per month. With projects getting larger and existing markets becoming saturated, developers have looked to new markets and struck deals with new counties and new utilities.”
Regionally, Virginia and Texas remain the dominant data center markets and the report finds they have experienced the most overall growth.
Data centers are owned by companies such as Amazon, Meta, Microsoft and Google, who are also big subscribers to solar power to offset their electricity use. The solar plants are often located in the same geographic region as the data centers they serve.
Meta, for example, recently signed an agreement with Cypress Creek Renewables, enabling construction of the 505 MWdc Hanson solar facility in Coleman County, Texas. Meta reports that it now has 6.7 GW of renewable energy online and 11.7 GW contracted. The company said it is matching 100% of its electricity use with renewable energy by adding new clean energy projects to local grids.
As data centers proliferate, the report notes that new markets are emerging, with data centers now found in Louisiana, Mississippi, Wisconsin and West Virginia.
Amazon, for example, recently secured full capacity of the Ragsdale Solar Park in Madison County, Mississippi.
“Developers are looking for opportunities in emerging states, where they can get favorable incentives,” said Hertz-Shargel. “These are some of the largest projects that have ever been built.”
There are at least 93 projects currently under construction in the U.S., according to Wood Mackenzie’s Lens Power, and nearly as many in the permitting process that are even larger.
With size comes cost, with Wood Mackenzie finding 13 of the projects coming in at more than $4 billion.
The report notes that of those projects it tracks, 73% of the $195 billion in capex belongs to the 22% of projects over $1 billion.
In addition to large investments and the need for large electricity loads, data centers are also requiring large tracts of land. The report finds that median data center building square footage increased 9.5% from 2023 to 2024 and the average campus square footage increased more than 23% over that period.
“The growing project size is evidence of the transition to AI workloads,” said Hertz-Shargel, “but creates even greater challenges for developers as well as utilities.”
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