Observed Signal · Jul 21, 2026 · Research Report · Source: techcrunch · Impact: 4/5 · Sentiment: Negative
Data centers to quadruple U.S. electricity use by 2035
A BloombergNEF forecast projects U.S. data centers will consume one-fifth of U.S. electricity by 2035 — roughly four times today’s share — driven by a surge in AI compute. Data center capacity is expected to approach 200 gigawatts over the next decade, with nearly half devoted to AI training and inference; the U.S. is forecast to account for 64% of AI chip power demand by 2033. BloombergNEF’s 2035 electricity estimate is 83% higher than its prior forecast, and other organizations (EPRI, S&P) have also raised their projections. Major U.S. grids will face strain: PJM could see 34% of its power go to data centers and ERCOT 22%, contributing to higher prices and interconnection challenges. Globally, aggressive AI adoption could add about 1,935 TWh of new demand by 2033.
A large projected increase in data center electricity demand will materially strain regional grids, raise prices, affect interconnection processes and capacity planning, and influence data center siting and sustainability strategies across the industry.
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Key Takeaways & Evidence Grounding
- BloombergNEF projects data centers will use one-fifth (20%) of U.S. electricity by 2035, four times the current share.
- AI compute will push data center capacity to nearly 200 gigawatts over the next decade, with nearly half devoted to training and inference.
- By 2033 the U.S. is forecast to host 64% of AI chips by power demand.
- BloombergNEF’s 2035 electricity-demand estimate is 83% higher than its December forecast; EPRI has more than doubled its 2024 estimate and S&P’s forecast rose by over a third between October and April.
- PJM could allocate 34% of its electricity to data centers and ERCOT 22%; data centers represented 38% of charges in PJM’s most recent capacity auction and electricity prices on PJM rose 76% year-over-year.
Connected Companies & Entities
2 Entities mapped“EPRI, an electrical industry nonprofit, has more than doubled its 2024 estimate, while S&P’s forecast rose by more than a third between Octo...”
“Tim De Chant is a senior climate reporter at TechCrunch....”
Ontology Mapping & Concepts
Related Market Signals & Shifts
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Electricity Is Becoming AI's Main Bottleneck
This Substack deep dive argues that in 2026 the AI industry's primary constraint is shifting from chips to power. Citing the IEA’s April 2026 report, the author notes global data-centre electricity demand grew 17% in 2025 and demand from AI-focused facilities grew 50%. The IEA projects data-centre consumption will rise from 485 TWh in 2025 to about 950 TWh by 2030. The piece outlines why capital alone cannot deliver the required gigawatts, how power pricing and contracts (including behind-the-meter deals) affect project economics, and the implications for turbine makers, power producers, site selection, and investors over the next three years.
US data centers to consume more natural gas than Germany and Japan combined
A new report from BloombergNEF projects that by 2035, U.S. data centers will consume about 18 billion cubic feet of natural gas per day, nearly double the previous forecast and more than Germany and Japan combined. This demand is driven by both onsite power plants and grid-connected data centers, with the latter expected to add 15 billion cubic feet per day by 2035. The surge could raise natural gas prices and increase greenhouse gas emissions by 1 million metric tons daily. Tech giants like Meta, Microsoft, Google, and Amazon are building natural gas plants to bypass the grid, contributing to the demand. Analysts at Noreva warn that reliance on stable gas prices may be misguided, potentially impacting utility ratepayers.
Solar to Dominate by 2035; AI Data Centers Sustain Fossils
A BloombergNEF report, cited by TechCrunch, forecasts that solar will become the largest source of power by about 2035 driven largely by rapidly falling costs and industrial-scale manufacturing. The consultancy warns that rising electricity demand from AI data centers and broader electrification will also drive large new capacity builds — including significant additions of gas and coal — because fossil plants can supply continuous 24/7 power. BloombergNEF projects data centers will spur major capacity additions across technologies and expects fossil fuels to supply about 51% of incremental generation for data centers by 2050. The report notes competing options (long‑duration storage, geothermal, nuclear) and cites corporate activity — such as Google buying $1 billion of 100‑hour batteries from Form Energy — that could shift outcomes depending on policy and technology adoption.
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