Data center growth puts unprecedented pressure on power grids

The spike in electricity needs is unprecedented, McKinsey wrote, and will be difficult to meet.

In another report released this week, Goldman Sachs also predicts a surge in data center power demand, and expects an increase of 160% by 2030, compared to 2023 levels.

Data center builds typically have timelines of 18 to 24 months, gas and renewable power plans have timelines of three to five years, and new transmission development can take seven to ten years. In fact, it’s the power transmission grid that’s often the biggest constraint, the research firm says, more even than the power generation capacity.

According to a report by Grid Strategies, construction of new high-voltage transmission lines has actually slowed recently, dropping steadily from a peak of 4,000 miles of new high-voltage lines  in 2012 to just 55 in 2023.

To meet demands, the DOE estimates that 115,000 miles will be needed by 2040, doubling current grid capacity.

Companies are already planning ahead for shortfalls.