AI boom leads to record electricity demand and stress test for energy networks

Hundreds of billions of dollars are currently flowing into the expansion of AI data centers. This will be a stress test for the electricity market in the USA. As the US Energy Agency (EIA) reports in its short-term energy forecast, demand for electricity is expected to continue to rise in the coming years.

After the previous high of 4,195 terawatt hours (TWh) in 2025, the EIA expects 4,268 TWh this year. In 2027, electricity consumption could climb to 4,391 TWh. The increase is primarily due to data centers for AI and cryptocurrencies. In addition, private households and companies would increasingly use electricity instead of fossil fuels for heating and transport, for example for electric cars.

Texas is pulling the emergency brake

However, there are massive regional differences in the United States. In the US state of Texas, for example, demand is rising particularly quickly. Many large operators such as Google, Microsoft and Amazon are building new data centers for artificial intelligence applications here.

At the beginning of August, Republican Governor Greg Abbott pulled the emergency brake and imposed a construction freeze on new data centers. Accordingly, the US Energy Agency has significantly lowered its forecast. For Texas, electricity demand will only grow by six percent in 2027, after an increase of 14 percent was previously expected.

New York has also already drawn conclusions

In July, New York was the first US state to temporarily ban the construction of further so-called hyperscale data centers. Tech companies are increasingly trying to produce their own electricity, building gas power plants or restarting decommissioned nuclear power plants.

Overall, data centers account for approximately four to six percent of electricity consumption in the United States. Gas and nuclear power are still the most important energy sources. The US Energy Agency calculates that the share of renewable energies in the electricity mix could rise to 27 percent in 2027.

Expansion is also reaching its limits in Germany

But there are also problems with AI expansion in Germany. In Frankfurt, where most data centers are located, electricity is also becoming scarce. According to a report in Spiegel, large and powerful new connections can only be made available there again from the mid-2030s onwards, the network operator said.

Environmentalists not only criticize the increasing electricity requirements of data centers, but also the water requirements. Because a lot of water is needed to cool the servers. This is becoming increasingly scarce in many regions of the world.