First came predictions of skyrocketing electricity consumption from data centers. Now, it’s starting to materialize.
The question is what it means for the grid and the planet.
Commercial electricity demand, a proxy for data center power consumption, is up 2 percent through the first nine months of 2025 compared to the same time last year, according to a review of federal data by POLITICO’s E&E News. That follows a 3 percent increase in 2024.
That’s a seismic shift for the U.S. power sector, whose electricity demand was flat for much of the last two decades. And that is expected to spike even higher as the Trump administration and technology companies try to outpace China in the race to develop artificial intelligence. The consulting firm Grid Strategies predicts that peak electricity demand nationwide could grow 166 gigawatts by 2030. That’s the equivalent of adding 15 New York Cities over the next five years.
“We’re now seeing in the data what we’ve all been talking about the last couple years,” said Rob Gramlich, chief executive of Grid Strategies. He estimated that data centers would account for 55 percent of the growth in U.S. electricity demand over the next five years.
Surging power requirements from data centers have become a political flash point this year as the cost of electricity climbs for voters. The climate impacts of the shift have received less attention but are nonetheless significant. Data centers could drive climate pollution down if tech companies build zero-emission technologies like solar, wind and nuclear. But planet-warming emissions could spike if data centers are powered by fossil fuels.
The climate stakes are especially high because the power sector has been the main driver behind falling U.S. emissions in recent years, as the country swapped old coal plants in favor of natural gas facilities and renewables.
Analysts say it’s too early to quantify the impact of data centers on the grid and the climate. Power generation trends today are influenced by larger economic factors, like the price of natural gas and the weather, which can drive electricity demand up or down.
Even so, 2025 offers some hints about how data centers could help green the electric sector or set it back.
Data center hot spots
As the U.S. shipped more natural gas abroad this year, and a hot summer and a cold winter pushed up demand for power, utilities fired up old coal plants that were idling on the sidelines. Coal generation nationally is up 13 percent, or 64 terawatt-hours, through September, according to U.S. Energy Information Administration figures.
At the same time, solar generation exploded thanks to the generous tax credits created during the Biden administration. Solar production grew 29 percent, or nearly 70 TWh. Natural gas generation, meanwhile, is down almost 4 percent, or 54 TWh, because of higher prices. The result was a 2 percent rise in carbon dioxide from power plants through September, compared to the same period in 2024, according to EPA data.
“Having a lot of load growth is certainly creating more emissions,” said Johannes Pfeifenberger, an analyst who tracks the power sector at the Brattle Group, a consulting firm. “Even if we add a lot of renewables, we need to produce power when the renewables aren’t producing. That is just a challenge of growth.”
Data-center development remains a largely regional story. Just 10 states accounted for 85 percent of U.S. commercial load growth through three quarters of 2025, according to EIA, or 23 TWh. Eight of those states are hot spots for data-center construction. (The exceptions are Massachusetts and New York, which boasted large increases in commercial load but have seen limited data-center development.)
In Ohio, a data-center hot spot where commercial power consumption was up 11 percent, coal generation rose 23 percent or 5.2 TWh. Solar was up 93 percent or almost 3.4 TWh. Meanwhile, gas generation fell by 6 percent or almost 4 TWh.
In Oklahoma, coal generation was up 58 percent, or 2.7 TWh, marking another hotbed for data centers where commercial electricity demand rose 10 percent. Solar was up 70 percent or 0.2 TWh.
And then there is Texas. The Lone Star State is ground zero for the country’s data center boom. Its commercial load grew 5.2 TWh through September, the largest absolute increase in the country. It has also long burned more coal than any other state, even though the carbon-intense fuel generates less of Texas’ electricity than natural gas, wind and, as of this year, solar.
Texas coal generation was up 8 percent through September, or nearly 3.7 TWh. But that figure was eclipsed by new solar generation, which grew a whopping 32 percent or 14.5 TWh.
The divergent trends show how the data center boom could unfold.
“Clean energy, they’re being supported with tailwinds from data centers and load growth,” Gramlich said. “But there is demand for power. So again, I think older power plants are staying online longer than planned and I think new plants are coming in, and that’s mainly gas.”
Impact of weather
Commercial electricity demand is not a perfect measure of how much power data centers are consuming. EIA classifies other sectors of the economy as users of commercial electricity, like hospitals, office space and retail buildings like malls. In 2024, it estimated that computing accounted for 8 percent of total commercial electricity consumption.
A deeper examination of the numbers reveals important nuances.
For instance, EIA does not differentiate between data center load and cryptocurrency operations. The Electric Reliability Council of Texas, which serves 90 percent of the state, breaks them into separate categories.
Cryptocurrency operations accounted for 4 TWh of new demand through September, according to ERCOT. Data centers, by contrast, are responsible for just 0.13 TWh of additional demand.
Nor is commercial electricity consumption the only part of the economy that’s pushing up demand. Residential power demand grew even more during the first three-quarters of 2025, increasing 2 percent, or 27 TWh, over 2024 levels. The increase is primarily a reflection of the weather, with a cold winter and a hot summer pushing up demand for power.
“I would offer that weather remains the undefeated champion of electricity demand,” said EIA analyst Glenn McGrath. “Data centers have clearly driven up average commercial sector growth, but when looking at changes within certain time frames and in certain regions, I think weather is the predominant factor. The natural variability of demand over the course of the year makes isolating the effects of things like data centers harder to see.”
The data center energy load that has materialized so far is only a fraction of what is expected. ERCOT has fielded requests for 225 gigawatts of electricity by 2030 from large consumers that want to connect to its grid.
Data centers also present unique challenges beyond the sheer quantity of electricity they require. They tend to consume power around the clock, pushing up the minimum amount of energy required by the grid. That is a boon for fuels like coal that tend to have less flexibility to ramp generation up and down, said Pfeifenberger of the Brattle Group. Data centers can also exacerbate peak events, adding to the amount of power needed during high demand hours and requiring more power generation to come online.
The ultimate impact to the grid and planet will depend on whether new data centers can be flexible by ramping down when demand peaks, said Michael Caravaggio, who studies the utility industry at the Electric Power Research Institute, a nonprofit. Data centers that switch to backup generators or use less electricity or during peak periods limit the amount of new generation that needs to be built, he said.
“That relieves a lot of load and provides a lot of potential room,” Caravaggio said.
It remains to be seen if 2025 is an outlier or a harbinger of things to come. Some trends seen this year could peter out, while others could accelerate. Solar installations are on pace to nearly match last year’s record levels and are expected to set new records in 2026 and 2027, when developers can still qualify for the Biden-era tax credits. But installations are expected to slump when the tax credits expire in 2028.
At the same time, technology companies are turning to gas to meet their generation needs. GE Vernova, the turbine-maker, said this month that it has booked contracts to make turbines capable of producing 80 gigawatts of new capacity over several years, up from around 50 GW in the first quarter of 2025.
The composition of all the new energy in the U.S. will go a long way toward determining the climate impact of data centers. Jeremy Fisher, an analyst who tracks the power sector at the Sierra Club, noted that the load growth observed so far is tiny compared to what is projected to come online in the coming years. Even so, the rate of demand growth from data centers has already caught up to the pace of renewable energy installations — and could soon exceed it.
“We are inevitably driving up substantial amounts of emissions on the system,” he said.
This story also appears in Energywire.
