The world’s data center industry is headed for an unprecedented surge in electricity demand, with new research forecasting that power consumption will rise nearly 300% by 2035. According to a fresh analysis released by BloombergNEF, the sector’s energy draw is projected to climb from today’s 40 gigawatts to a staggering 106 gigawatts within the next decade.

This explosive growth is tied to a continuous wave of large-scale data center projects, many of which are migrating from urban hubs to more rural regions due to land constraints and the increasing size of modern facilities. BloombergNEF notes that while only 10% of existing data centers currently operate above 50 megawatts, future developments are expected to far surpass that threshold.

Over the next ten years, the average newly built data center will consume well over 100 megawatts. Nearly a quarter of upcoming facilities are planned to exceed 500 megawatts, with some mega-sites projected to cross the 1-gigawatt mark — the equivalent power output of a large utility-scale power plant.

The study also highlights rising utilization rates. As artificial intelligence (AI) workloads — including model training and inference — expand rapidly, overall data center utilization is expected to grow from 59% to 69%, with AI operations accounting for nearly 40% of total compute.

AI’s accelerating footprint helps explain the spike in global investment. Spending on data centers worldwide has risen to an estimated $580 billion this year, a figure BloombergNEF notes is now greater than global spending on oil exploration.

The findings also represent a sharp upward revision from the group’s earlier projections published in April. Analysts attribute the change to a wave of new large-scale project announcements. With an average project timeline of seven years, these recently initiated developments heavily influence long-range forecasts.

Early-stage data center projects have more than doubled between early 2024 and early 2025. Many of these new builds are planned for states within the PJM Interconnection region — including Virginia, Pennsylvania, Ohio, Illinois, and New Jersey — while Texas’ ERCOT grid is also preparing for significant additions.

However, the aggressive growth trajectory has triggered regulatory concerns. The PJM Interconnection is currently under scrutiny following a complaint filed with the Federal Energy Regulatory Commission (FERC) by its independent monitor, Monitoring Analytics. The watchdog argues that PJM must ensure that new data center loads are only connected when the grid has adequate capacity to support them.

“As part of its obligation to maintain reliability, PJM has the authority to require large new data center loads to wait to be added to the system until the loads can be served reliably,” Monitoring Analytics stated, adding that PJM possesses the authority to establish a structured load queue.

The group also warns that data centers are a key driver of rising electricity prices across the region, accusing PJM of failing to enforce its policies effectively.

“PJM’s failure to clarify and enforce its existing rules and to protect reliable and affordable service in PJM is unjust and unreasonable,” the monitor said.

As global demand for AI and cloud computing continues to climb, the debate over how to balance rapid digital expansion with grid reliability is expected to intensify.

Source: Techcrunch