The growing demand for electricity in the coming years may overload U.S. systems. The consequences could be higher natural gas prices and problems for liquefied natural gas plants.
UNN reports with reference to Reuters.
Details
According to a recent report by the International Energy Agency, by 2030, the share of data processing centers in the U.S. energy market will increase from 6% today to 13%. This will increase electricity demand growth by almost half.
Demand for electricity from American data processing centers will increase by approximately 240 terawatt-hours, which is approximately equal to the total global electricity demand for data processing centers in 2022, between 2024 and 2030.
The sharp increase in electricity demand in the coming years, driven by the development of artificial intelligence, may put a heavy burden on "creaky" energy systems, the publication writes. This will affect the infrastructure of the United States.
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At the same time, natural gas is expected to provide more than 130 TWh of this additional demand.
Gas is already the largest source of electricity for data processing centers, meeting 40% of these needs.
The above-mentioned changes that may occur over a period of 5 years will affect natural gas prices. The economics of LNG plants may suffer.
Gas production is growing. Do AI systems consume more?
U.S. natural gas production has increased sharply over the past 15 years thanks to vast onshore shale deposits in the U.S. LSEG also forecasts that production of supercooled fuel will more than double by 2028. We are talking about reaching almost 30 billion cubic feet per day (currently, forecasts confirm an increase from 12 to 27 billion cubic feet in 4 years - from 2024 to 2028).
Gas production in the U.S. will peak in the early 2030s. However, the rapid growth in LNG production, driven by cheap domestic prices, may not keep pace with the growing demand for natural gas from data processing centers and other industrial and residential sources. This is one of the factors driving up gas prices in the U.S. over the next period.
Currently, the cost of building a gas power plant has tripled since 2022 to $2,400 per kilowatt. This was recently confirmed by NextEra Energy Director John Ketchum.
Critical state of infrastructure in some areas of the United States
But there is also the problem of outdated energy infrastructure. The U.S. has not invested enough in a full-scale modernization, the article says.
The corresponding problem manifested itself in a wave of power outages in Texas and Florida in 2021 and 2024. Back then, it was caused by severe storms.
As demand for electricity and gas in the U.S. grows, so does the pressure on the country's energy infrastructure, such as electricity transmission and distribution systems and gas pipelines.
Thus, this set of factors is essentially a prerequisite for more outages and greater gas price volatility.
Let us remind you
The artificial intelligence boom requires huge computing power and energy loads, creating risks for the power grid and the transition to cleaner energy sources, as AI may force companies to rely more on fossil fuels than expected.
U.S. natural gas futures hit a two-year high due to severe winter conditions. Freezing gas wells and record LNG exports led to a 29% increase in prices in a week.