The AI boom is driving massive energy demand. But the power infrastructure isn’t ready. Here’s what industry leaders need to know.
What’s Driving the Surge in Data Center Demand?
AI, cloud computing, crypto mining, and digital transformation are rapidly increasing the scale and energy intensity of data centers across North America. Hyperscale platforms and enterprise AI workloads are accelerating timelines and pushing power and utility infrastructure to its limits.
But the growth isn’t hypothetical — it’s already showing up in the numbers.
PJM’s January 2025 Long-Term Load Forecast shows a notable uptick in projected demand across its footprint, particularly on the western side of the interconnection. While near-term growth is expected, long-term forecasts remain volatile. At Tangibl, we’ve always viewed multi-year load forecasts with healthy skepticism. Like long-dated power or gas forwards, their viability diminishes in the out years of the forecast.
As we often say:
“Take any forecast, cut it in half long term, and run your analytics on what remains — or at least treat the full forecast as a high case.”
Even marginally less energy-intensive constructs like DeepSeek’s reportedly lower-energy AI training model won’t necessarily slow data center power demand. History shows that when something becomes cheaper — whether it’s an LED lightbulb or energy for hyperscale processing — society tends to use more of it. Paradoxically for policy makers, efficiency often drives consumption.
The Power Planning Gap
A February 2025 Jefferies report highlighted a critical disconnect between data center growth and available power supply.
According to McKinsey forecasts, ~20 GW of new data center power demand is expected between 2025–2027. Yet much of this development remains unsupported by secured power:
- ~5 GW: Under construction with power secured
- ~3 GW: Using on-site or adjacent natural gas generation
- ~5–6 GW: Utilities have issued “will serve” letters, but are early in the process
- ~5–6 GW: No firm power commitments yet
An additional 30+ GW of demand is forecast for 2028–2030, with even less clarity on energy sourcing, compounding delay risks and adding pressure to already-strained interconnection queues.
What This Means for Developers, Utilities, and Investors
Traditional utility planning timelines and interconnection processes are no longer aligned with how fast the digital economy is scaling. As power planning becomes more critical, and less predictable, stakeholders will need to embrace more flexible, resilient strategies:
- Behind-the-meter thermal assets (e.g., gas)
- Distributed energy and storage solutions
- Advanced interconnection strategy and permitting
This is not just an engineering challenge — it’s a commercial and timing challenge. Projects that align technical strategy with commercial urgency will win.
How Tangibl Helps
At Tangibl, we help data center developers, utilities, and infrastructure investors navigate the complexity of energy delivery at scale and speed. Our services include:
- Interconnection strategy and utility coordination
- On-site generation and DER integration
- Electrical, mechanical, and structural engineering services
- Execution planning that bridges engineering and market realities
Whether you’re expanding hyperscale capacity or constructing co-located generation, Tangibl delivers the insight and execution to help you move fast — and build smarter.
Let’s talk energy strategy.
www.tangiblinc.com