Data Center Microgrids

Meeting Data Center Energy Demand Requires Multiple Power Generation Strategies

March 12, 2025

Those can include microgrids. The new report by Accenture shows that data centers alone could consume almost one-fifth of total nationwide utility-scale electricity by 2033, up from the current 5%.

Rod Walton, Managing Editor

67d19f1103a947bd31724b7d Shutterstock Data Center

Any good futurist will offer forecasts that are both exciting and scary. Here’s why: The first part empowers us to think positively, while fear motivates us to do better and avoid disaster.

The U.S. data center market is kind of like that. We are all excited, or often alarmed, about artificial intelligence and cloud-based computing growing ever stronger. We know we won’t want to fall behind other countries in this capacity, but we’re not sure how in the world we’re going to power it all.

A new report by global energy consulting firm Accenture, “Powering the Future of U.S. Data Centers,” shows that data centers alone could consume almost one-fifth of total nationwide utility-scale electricity by 2033, up from the current 5%. Accenture’s analysis forecasts that advanced AI-computing may drive 70% of that energy demand growth within data centers.

Utilities which were predicting flat load growth only a few years ago are now scrambling to gain load commitments which can help it finance new power generation capacity and transmission investment. Tech and data giants such as Amazon Web Services, Microsoft and Google are already considering alternatives beyond conventional, including small modular reactor nuclear energy and off-grid power plants dedicated to energizing specific facilities.

Factoring in energy to fit the data center

Microgrids also are part of this equation, whether they are future nuclear, gas-fired or hybrid power systems incorporating hydrogen and renewable energy. They would surely help alleviate the current logjam of data centers massed in certain regions, particularly northern Virginia.

Data centers traditionally have been located based on factors such as land availability, obviously, but also proximity to fiber optic connectivity and reliable utility interconnection. Increasingly, the siting decision is centered around power generation capacity as much as the fiber optic lines.

“Electricity providers must adopt tailored strategies, including localized grid enhancements, to meet regional surges in demand while ensuring equitable energy distribution nationwide,” reads the Accenture report written by several directors within the firm. These include senior managing directors Scott Tinkler and Vivek Chidambaram, as well as James Mazurek, the company's managing direcctor and U.S. Utilities Strategy lead, who is speaking at CERAWeek this week in Houston on U.S. power infrastructure and who will pay for its upgrade.

Data centers suck up a lot of resources, including energy and water. In the U.S., those facilities consumed about 176 Terawatt hours (TWh) in 2023, and about 80% of that load was concentrated in only 15 states, Accenture noted.

Grid operators under pressure

Future AI-ready and data center consumption growth will tax certain regional grid systems harder than others, but all of them will be dealing with accelerated demand which could threaten total power capacity across the grid. The PJM Interconnection, for instance, totaled 54 TWh meeting data center demand in 2023, but that load could nearly double to 100+ TWh by 2027 and, in the biggest case, more than triple to 182 TWh by the early 2030s, according to the Accenture analysis.

Energy efficiency is often considered the so-called “first fuel” in decarbonization, but it alone cannot meet the challenges brought forward by AI, edge computing and cryptocurrency mining.

“Now is the time for action,” the Accenture authors wrote.

How to act? Well, the report noted, sometimes the challenge also provides the answer: Leveraging AI and machine learning can enhance demand response solutions. Electricity providers also must work more closely with hyperscale data center developers to optimize facility location.

Improving the regulatory interconnection process, or shortening the several years-long delay, is also a critical strategy, Accenture advised.

Increasing investment in power resource diversification, such as renewables and battery storage on-site, can help ensure consistent supply, the report reads.

Rethinking generation capacity planning by factoring in carbon-free technologies such as renewables and SMR nuclear also offers a future-forward strategy. These require thoughtful and incremental investment approaches, the Accenture report stressed.

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About the Author

Rod Walton, Managing Editor | Managing Editor

For Microgrid Knowledge editorial inquiries, please contact Managing Editor Rod Walton at [email protected].

I’ve spent the last 15 years covering the energy industry as a newspaper and trade journalist. I was an energy writer and business editor at the Tulsa World before moving to business-to-business media at PennWell Publishing, which later became Clarion Events, where I covered the electric power industry. I joined Endeavor Business Media in November 2021 to help launch EnergyTech, one of the company’s newest media brands. I joined Microgrid Knowledge in July 2023.

I earned my Bachelors degree in journalism from the University of Oklahoma. My career stops include the Moore American, Bartlesville Examiner-Enterprise, Wagoner Tribune and Tulsa World, all in Oklahoma . I have been married to Laura for the past 33-plus years and we have four children and one adorable granddaughter. We want the energy transition to make their lives better in the future.

Microgrid Knowledge and EnergyTech are focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids. The C&I sectors together account for close to 30 percent of greenhouse gas emissions in the U.S.

Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.