Data centers could raise power costs 50%

North Carolina State University researchers said on May 18 that electricity demand from data centers and cryptocurrency mining is likely to raise power costs in some parts of the United States by as much as 57% by 2030. The study, published in Environmental Research Letters, estimated national average electricity-cost increases of 6% to 29% and said related power demand could also push carbon dioxide emissions up by as much as 28% relative to a future with no data-center growth. Jeremiah Johnson, the paper’s corresponding author and an associate professor at North Carolina State, said U.S. power demand had been relatively flat for almost 20 years before rising in the past couple of years, “due largely to data centers and — to a lesser extent — cryptocurrency mining.” The researchers said they modeled hourly supply and demand across 26 power-grid regions in the lower 48 states to test how projected load growth through 2030 would affect generation, infrastructure, costs and emissions. (news.ncsu.edu) ### How did the researchers get to those numbers? The authors said they used an energy-system optimization model to estimate the least-cost ways the power sector could meet rising demand while complying with existing laws and regulations. Anderson de Queiroz, a co-author and associate professor at NC State, said the model focused on electrical power generation and allowed the team to examine hourly conditions across the country. (news.ncsu.edu) Princeton University’s Center for Policy Research on Energy and the Environment described the work earlier this year as an assessment of projected demand through 2030, including power-sector capacity expansion, retirements and dispatch decisions across 26 interconnected U.S. regions. That summary said the largest demand increases were concentrated in Northern Virginia and Texas, with regional effects varying substantially. (news.ncsu.edu) ### Why are some places at greater risk than others? Northern Virginia and Texas stood out in the researchers’ summaries because those markets already host dense clusters of data centers or large planned expansions. The Princeton seminar page on the study said regional effects vary widely and that the biggest demand increases are concentrated in those areas. (cpree.princeton.edu) The Federal Reserve Bank of Dallas wrote in a March 5 analysis that even a modest data-center boom could substantially raise retail electricity prices and annual inflation, especially when grid upgrades and new infrastructure are needed quickly. That paper said the traditional utility model works poorly when a single data center requests the power equivalent of a small city, because connection fees are often modest relative to the cost of expansion, leaving existing customers exposed to some of the bill. (cpree.princeton.edu) ### Are data centers the only reason bills are rising? CNBC reported on March 13 that analysts and industry participants disagree on how much of the recent run-up in electricity prices should be pinned directly on hyperscale data centers. The outlet said residential electricity prices in the United States had risen more than 36% since 2020, citing Energy Information Administration data, while SemiAnalysis argued market design and policy choices also play a major role in some regions. (dallasfed.org) Jeremiah Johnson did not frame the new paper as the only explanation for higher bills. He said the study was meant to test what additional infrastructure would need to be built, where those systems would operate and what that would mean for electricity costs and emissions as data-center and crypto-mining demand rises. ### Why does this matter now for utilities and power companies? NextEra Energy and Dominion Energy announced on May 18 a $66.8 billion all-stock deal that would create the world’s largest regulated electric utility by market value, as utilities race to meet surging electricity demand from AI-linked data centers. (cnbc.com) Reuters reported the combined company would be one of the world’s largest electric utilities, while CNBC said Dominion powers the world’s largest data-center market in Northern Virginia. (news.ncsu.edu) The timing matters because the new study adds another quantified estimate of what rapid load growth could mean for households, grids and emissions through 2030. The NextEra-Dominion transaction still requires regulatory approvals, and the Environmental Research Letters paper is now part of a widening public record that regulators, utilities and consumer advocates can cite as those power-demand fights move forward. (money.usnews.com) (msn.com)