Report: Data Center Power Demand Surge Will Continue

Energy demand forecasts will struggle to keep up with the development of hyperscale data centers in the coming years, a new report from a leading data analysis and consulting company indicates.

The 2026 U.S. Data Centers and Energy Report, compiled by S&P Global Market Intelligence, indicates that a spike in demand for electricity that has been roiling the energy markets for several years will continue to accelerate. The report projects that power demand from data centers in the U.S. will almost double to 728 terawatt-hours (TWh) in 2030 from a projected 366 TWh in 2025.

The rapid increase in demand has regional grid operators struggling to integrate the new loads, while new generation is not coming online fast enough. PJM Interconnection, the regional grid operator for 13 Mid-Atlantic states including Pennsylvania, is struggling to modernize its regulations and come up with a plan on how new data centers should be connected to the grid without further raising costs for residential customers and how new generation can be quickly added.

Data center developers are using an “all-of-the-above” approach to find enough power for their projects, even as the use of fossil fuel fired plants goes against sustainability goals. The report notes large data center companies are seeking nuclear power because it is carbon-free and constantly available. There have been several recent power-purchase deals between large tech companies and nuclear plant owners in Pennsylvania, including Meta and the owner of the Beaver Valley nuclear plant and restart of a reactor at the Three Mile Island nuclear plant to supply Microsoft’s data center power needs.

Natural gas is also playing a critical role, as new gas-fired plants for data centers are increasingly being proposed. However, there are supply chain issues affecting timelines. Developers are also looking at co-locating data centers near existing power plants or building new “behind-the-meter” generation to directly connect to data centers.

The buildout of AI data centers and the increasing demand for power shows no immediate signs of leveling off. The S&P report indicates that while data centers will use almost 10% of all power generation in 2026, that percentage will rise to 14% by 2030.