PG&E expects 3.5 GW data center growth by 2029 (original) (raw)

(Data Center photo. Courtesy Microsoft.)

Pacific Gas & Electric (PG&E) expects to see 3.5 GW of new capacity requested from data centers between now and 2029, according to an investor update recently released by the utility.

In the investor update, PG&E laid out a data center pipeline that includes the requested load and the location of the request. The companies requesting load for data centers have not yet been named, but one customer requested more than 1.3 GW across the state. Requests range from 10 MW to 800 MW for individual customers with multiple project sites, in areas like San Jose, Hayward, Fremont, San Francisco, and Sunnyvale, with installation dates between 2024 and 2029.

PG&E noted in the update that San Francisco is one of eight primary data center locations in the U.S. given its proximity to Silicon Valley, a growing tech customer base, a vast fiber network, and a clean energy supply. However, San Francisco only accounts for 70 MW of the requested load, from two projects: one 60 MW, and one 10 MW. San Jose accounts for over half of the requested load, with 1,635 MW requested.

At least 38 GW of peak demand growth is expected through 2028, driven by the development of data centers and industrial and manufacturing facilities, according to a recent report from Grid Strategies.

The report, The Era of Flat Power Demand is Over, cited forecasts from grid planners, who have doubled the five-year load growth forecast over the past year. The nationwide forecast of electricity demand jumped from 2.6% to 4.7% growth over the next five years, according to FERC filings – and these forecasts are likely an underestimate, Grid Strategies said. Recent updates have tacked on several GW to that forecast, and next year’s will likely show an even steeper growth rate.

Technology giants like Microsoft, Google, and Amazon are significantly driving electricity demand, primarily through extensive and rapidly expanding data center operations. These data centers are essential for supporting cloud services, AI development, and other digital operations. The facilities require vast amounts of power to run servers, cooling systems, and other infrastructure needed to store and process massive amounts of data.

According to a new study released by EPRI, data centers could consume up to 9% of U.S. electricity generation by 2030 — more than double the amount currently used. This could create regional supply challenges, among other issues.

AI queries require approximately ten times the electricity of traditional internet searches and the generation of original music, photos, and videos requires much more. With 5.3 billion internet users, rapid adoption of these new tools could increase power demands substantially. At the same time, computing facilities are becoming more concentrated, with single facilities now requesting power consumption that can range from the equivalent of 80,000 to 800,000 homes, exacerbating power delivery challenges.

Drawing on public information about existing data centers, estimates of industry growth, and private electricity demand forecasts by industry experts, EPRI outlined four scenarios of potential annual electricity consumption in U.S. data centers from 2023 to 2030, with annual growth rates ranging from 3.7% to 15%. The lowest scenario assumed limited public uptake of AI tools, coupled with high gains in data center efficiency, and the highest scenario combined rapid expansion of AI applications with fewer efficiency gains. These scenarios placed data center power ranges from 4.6%-9.1%.