AI Is Creating Three Pressing Power Challenges
On one hand, using AI isn’t rocket science. It’s getting easier for humans as the models train themselves to become more intuitive. On the other hand, using AI is absolutely rocket science. Maybe even something closer to magic. More and more people are interacting with AI – many intentionally and maybe just as many without even knowing. Copilot puts the estimate at 500 million to 600 million people using AI daily. (And that stat comes from late 2025!)
That’s a staggering (and probably conservative) estimate, and it begins to explain how AI adoption is creating profound, unique pressures for the massive industrial-scale data centers powering the AI boom. Behind every prompt, every model, every assistant, every AI-generated answer… there’s electricity. A LOT of electricity.
For data centers supporting the AI boom, three pressures now dominate strategic planning: power reliability (including resilience), power availability, and power price.
Reliability Pressures — AI Workloads are Beginning to Stress the Grid.
AI-driven compute requirements are climbing at a rate that outpaces what many regional grids can reliably deliver. The Belfer Center projects U.S. data center electricity demand rising from 176 TWh in 2023 to as much as 580 TWh by 2028 — a staggering 300%(!) increase in half a decade. And, as AI becomes the dominant load across multiple markets, Goldman Sachs forecasts a 165% global increase in data center power demand by 2030.
The problem isn’t just load growth — it’s regional concentration. Today’s AI-optimized campuses routinely draw power comparable to small cities. In one incident, a voltage fluctuation in Northern Virginia caused 60 data centers to disconnect simultaneously, illustrating the fragility of high-density clusters under stress. Factor in the increase in the renewable curtailment across many U.S. regions and reliability margins continue to shrink.
Axios notes data centers are expanding rapidly across the Midwest, as well, as AI adoption drives electricity demand in states like Kansas, Iowa, Ohio, Michigan, Indiana, and Wisconsin. This surge is already straining regional energy systems, with utilities warning their grids were never designed for this scale of load growth.
Availability Pressures — Power has Become a Gatekeeper.
Across nearly every major data center hub, the biggest barrier to expansion isn’t capital or cooling or compute hardware. It’s power availability.
As we see widening interconnection timelines and geographic shifts in growth, JLL notes markets with abundant power like Texas are gaining share, while others such as California and Oregon could lose more than half of their relative position by the early 2030s. JLL’s Global Data Center Outlook shows that new high-density racks (40–130 kW each) are putting unprecedented strain on utility infrastructure. In even more direct terms, BloombergNEF calls electricity access “existential” for AI-centered companies as developers increasingly prioritize locations where power, permits, and land are available quickly.
Price Pressures — Market Volatility Is Changing Power Procurement.
As demand surges and supply tightens, electricity prices in dense data center markets are rising fast. Earlier this month, Virginia’s State Corporation Commission acknowledged that PJM capacity auction prices, which continue to break records, are largely driven by data-center load growth. And, as a result, lawmakers in at least a dozen states have targeted data centers with separate, higher electric rates to protect other customers.
“The speed and magnitude of these price increases in PJM have put tremendous pressure on our clients,” according to Melanie Hash, Regional Market Manager within SE Advisory Services. “They have tangible, significant impacts on already tight energy budgets. The uncertainty of what will happen over the next several years looms over every decision.”
Many data center operators are already exploring and adopting “next-wave” supply strategies in their search for predictable long-term power structures, including self-supply and/or behind-the-meter (BTM) generation, including large-scale battery storage. Perhaps not surprisingly, tech giants have become the world’s largest buyers of renewable PPAs to offset volatility and secure long-term supply.
As AI adoption accelerates, utilities are turning to solar-plus-storage PPAs because as the cheapest and fastest new sources of electricity in most markets. Developers report battery systems can be built in 15 months and large solar arrays in 18 months, much faster than fossil-based alternatives. Projections estimate new gas capacity won’t come online until 2030 or later, which explains many utilities’ plans to add 110 GW of solar and 63 GW of storage, compared with just 25 GW of new gas.
Driving Solutions and Sustainability Simultaneously.
Alex Rakow, Schneider Electric’s Sustainability Director, Data Centers, highlights a fourth consideration for many in the cloud and service provider (C&SP) space: sustainability. As Rakow explains, “The data center industry is realizing that sustainability is not something extra you have to buy, or a sacrifice that needs to be made at the expense of other business imperatives. Instead, we're finding that the same levers that can help optimize speed-to-market, cost, and resilience can also advance sustainability performance.”
Rakow continues: “A grid-interactive data center with onsite DER can optimize for cost and emissions, while hardening the facility against climate risk. Prefabricated data centers can save on labor, waste, and embodied carbon. And of course, all efficiency gains control both opex and emissions. At the pace we're building, if we're not solving multiple problems at once, we're not moving fast enough!”
Time is scarce and timing is critical to build resilience now, and we are uniquely positioned to help. In fact, Data Centre Magazine recently ranked Schneider Electric #2 on its list of Top 10 Sustainability Consultants.
SE Advisory Services’ Power Risk Assessment is a great first step. Take three minutes to input your site information and we’ll use it to customize a portfolio-specific analysis that outlines your biggest power risks and clearest pathways to address them.
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