As the U.S. braces for a massive surge in electricity demand, utilities are committing to an unprecedented 116 gigawatts of large load capacity—equivalent to 15.5% of current peak demand—with much of this growth driven by the rapid expansion of data centers. According to a recent study by Wood Mackenzie, 60 GW of this capacity is expected to come online by 2030, and 93 GW by 2035. However, the pace of interconnection, grid constraints, and concentration of projects in deregulated markets such as ERCOT and PJM are creating uncertainty around whether this demand can be reliably met.

To better understand the challenges and opportunities in securing electricity for these large consumers, Review Energy spoke with Pooja Shah, Senior Consultant at DNV, about the evolving energy landscape, the role of renewables and storage, and what it will take to ensure reliable and affordable power for data centers in the years ahead.

Review Energy (R.E.): What are the main challenges for data centers in securing the necessary electricity supply in the coming years?

Pooja Shah (P.S.): The biggest challenge for data centers in the coming years will be securing reliable, scalable electricity supply fast enough to match the forecasted load growth, given grid capacity constraints, long interconnection queues, and growing competition for power. A strategy that leverages all types of energy generation will be necessary to ensure long term availability and resilience, however, in the near term, renewables and storage remain to be the fastest and most cost-effective solutions meeting this need. 

R.E.: How does the concentration of new projects in deregulated markets like ERCOT and PJM affect energy prices and availability?

P.S.: Concentration in markets such as ERCOT has led to large volume of curtailed energy due to congestion. While this does impact energy pricing and can lead to economic disarray, it provides an opportunity for local load centers to benefit from the residual available energy. This is one approach by data center developers to meet the electrify demand of their facilities at an economically attractive pricing. 

R.E.: Given the rollback of clean energy initiatives under the Trump administration, how will this impact the U.S.’s ability to meet the growing demand from large consumers such as data centers?

P.S.: Rolling back clean energy initiatives can create headwinds for meeting the growing electricity demand from large consumers such as data centers. However,  renewables and storage  continue to offer the quickest path to scalable, affordable, and reliable power to the industry in the short term while other sources such as thermal generation and nuclear may play more dominant role in longer term. 

R.E.: What role can renewable energy and storage play in shortening connection times for projects over 300 MW, considering recent regulatory changes?

P.S.: Storage paired with renewables play a critical role in enabling large-scale projects to move forward efficiently, bypassing grid bottlenecks and keeping costs and timelines under control despite regulatory change, while providing an opportunity for other sources of generation gain grounds.

R.E.: Looking toward 2035, do you believe the combination of private investment and current policies will be sufficient to ensure supply certainty for large loads, or are further adjustments needed?

P.S.: Even with the combination of strong private investment and current policies, supply certainty for large loads is not guaranteed, particularly given unprecedented load growth projections and forecasted increase in energy prices. This creates an opportunity to re-imagine the grid and energy mix, leverage an all-inclusive approach towards generation, and deploy smarter interconnection and generation to load strategies to ensure reliable and affordable power for the future.

The future of energy industry is an amalgamation of all available, reliable, and financially viable, sources.