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BloombergNEF Expects Data Center Power Use to Nearly Quadruple by 2035
If all were built, the proposed on-site gas plants at U.S. data centers would emit more than average grid power, and many could run longer than intended.
Electricity demand from data centers is on track to hit 2,354 terawatt-hours by 2035, equal to 7% of global electricity use, BloombergNEF (BNEF) said in a Nov. 11 announcement of a new report.
Bloomberg Philanthropies commissioned the report, titled Powering the Data Center Boom: How Grid Policy Can Deliver Clean Power Faster. Limits on the U.S. and European grids are slowing new hookups for large loads, the report found. Drawn by the financial rewards of powering up quickly, some developers are building gas-fired power on site while they wait to connect to the grid.
Gas-fired generation that has been announced and proposed alongside data centers adds up to 181 gigawatts in BNEF’s tracking, with more than 90% of it in the U.S. Those projects are at very different stages and on different timelines. BNEF said the figure should be read as a sign of potential scale, not a prediction of how much will get built.
Built out in full and run under BNEF’s assumptions, the on-site gas plants announced for U.S. data centers would release roughly 345 million metric tons of carbon dioxide equivalent a year. That would be 152 million metric tons more than if the same data center capacity ran on average U.S. grid power, a gap equal to 10% of what the U.S. power sector emitted in 2025. Many of the plants are meant as a stopgap until a grid hookup, but BNEF found their economics could lead them to keep running once online, risking fossil-fuel lock-in over the longer term, beyond the yearly emissions.
BNEF called grid connection the more sustainable route for new data centers in the U.S., Europe and other developed markets, so faster hookups matter for curbing near-term emissions and lock-in risk. Cutting carbon from the power system at the same time is still vital, the firm said. Many of the policies the report reviews across 17 markets to speed up connections should shorten waits, though there is limited empirical evidence on which will work best.
In emerging markets where power systems still lean heavily on coal, BNEF found grid-connected data centers can fare even worse than those with on-site gas power. Building out clean generation alongside new power demand is even more central in those markets, the firm said. The report examines four emerging markets: Brazil, India, Indonesia and Malaysia.
