Data center energy demand expected to increase nearly 300% by 2035

Planned data center construction shows no signs of slowing down, with new additions expected to require 2.7 times, or nearly triple, the industry’s current electricity demand over the next decade, according to a new report from BloombergNEF.

By 2035, data centers will consume 106 gigawatts, a big increase from the 40 gigawatts they use today. Much of this growth will occur in more rural areas as facilities expand and sites near urban areas become scarce, BloombergNEF said.

Part of the growth is due to the scale of planned data centers. Today, only 10% of data centers consume more than 50 megawatts of electricity, but over the next decade, the average new facility will consume well over 100 megawatts. The largest sites contribute to skewing the data: almost a quarter will have a power greater than 500 megawatts, and a few will exceed 1 gigawatt.

At the same time, the utilization rate of all data centers is expected to increase from 59% to 69%, as AI training and inference reaches almost 40% of total data center computing.

In some ways, the new report’s findings are not surprising. AI companies have rushed to build more powerful data centers, helping to drive global investment in such facilities of up to $580 billion this year. That’s more than the world spends finding new oil reserves.

Yet the new report shows how quickly the landscape is changing. This is a sharp upward revision from a paper released by the group in April. This recovery is explained by a multiplication of new projects announced since. “With an average lead time of seven years for projects to come online, developments in earlier stages most affect the end of our forecasts,” the new report states.

Projects in the start-up phase more than doubled between early 2024 and early 2025, although they are distinct from projects that have been committed or are currently under construction.

Much of this new capacity is planned for Virginia, Pennsylvania, Ohio, Illinois and New Jersey. They’re in a region familiar to industry experts at PJM Interconnection, a regional transmission organization charged with operating the electric grid in those states and others, including Delaware, West Virginia and parts of Kentucky and North Carolina. Ercot’s network in Texas will also see a large number of additions.

The report comes as the PJM Interconnect is under scrutiny by its independent monitor, Monitoring Analytics. The group filed a complaint with the Federal Energy Regulatory Commission (FERC), asserting that PJM has the authority to authorize new data center connections only when its network has adequate capacity.

“As part of its obligation to maintain reliability, PJM has the authority to require that new large data center loads wait to be added to the system until the loads can be reliably served,” Monitoring Analytics wrote. “PJM has the power to create a loading queue.”

Additionally, data centers are responsible for high electricity prices in the region, the organization said.

“PJM’s failure to clarify and enforce its existing rules and protect reliable, affordable service within PJM is unfair and unreasonable,” he said.

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