America’s Power Demand Is Rising Again—And Data Centers Are the Reason
- Todd Colpron
- 7 days ago
- 3 min read
After nearly two decades of relatively flat electricity consumption, the United States is entering a new era of power demand growth. This shift is not being driven by population growth, household consumption, or traditional heavy industry. Instead, it is being propelled by data centers—specifically those supporting cloud computing, artificial intelligence, and high-performance workloads.
Federal energy forecasts now show that U.S. electricity usage is set to rise more over the next several years than during any comparable period since the early 2000s. The driver behind this acceleration is not cyclical. It is structural. Digital infrastructure has become one of the country’s fastest-growing sources of electricity demand, and its growth curve is steepening rather than flattening.
At the center of these projections is the explosive rise of compute intensity. Modern AI models, large-scale cloud platforms, and real-time data processing require vastly more power per square foot than earlier generations of IT infrastructure. Where enterprise data centers once consumed power in the single-digit megawatt range, today’s hyperscale facilities are designed for tens, hundreds, and in some cases multiple hundreds of megawatts—often with expansion phases planned from day one.
The U.S. Energy Information Administration now attributes the majority of projected electricity growth over the next four years to data centers. This marks a sharp departure from past demand models, where efficiency gains in appliances, lighting, and industrial processes largely offset growth. AI and cloud workloads are overwhelming those gains.
This shift is also geographic. Power demand is no longer evenly distributed across the grid. It is clustering around established and emerging data-center corridors—Northern Virginia, Texas, the Southeast, the Midwest, and parts of the Mountain West. In many of these regions, data centers are becoming the largest single source of new load requests, straining substations, transmission capacity, and generation planning timelines.
Utilities and grid operators are now facing a challenge they have not had to solve at scale in years: how to deliver large blocks of reliable power quickly, predictably, and at competitive cost. Interconnection queues are lengthening. Transmission upgrades are taking longer. In some markets, utilities are signaling that new large-load connections may be delayed by years without substantial infrastructure investment.
For data-center operators, this changes the development equation entirely. Power availability is no longer an assumed input—it is the gating factor. Site selection is increasingly dictated not by land cost or tax incentives, but by whether 100 to 500 megawatts of power can be delivered within a viable timeframe. In several markets, operators are now securing power solutions before finalizing real estate.
This dynamic is also reshaping capital allocation. Investors are beginning to differentiate between projects that are “power-secured” and those that are merely “power-aspirational.” Facilities with firm generation access, on-site power strategies, or expedited grid pathways are commanding premium valuations. Projects without clear power visibility face delays, cost overruns, or stranded development capital.
At the same time, the power sector itself is adjusting. Natural gas generation is re-emerging as a critical bridge solution, particularly for data centers that cannot wait for long-cycle grid upgrades or fully renewable portfolios to come online. Modular generation, on-site power plants, and hybrid solutions are increasingly viewed not as stopgaps, but as core infrastructure.
This is not a temporary surge tied to a single technology cycle. AI workloads are still in their early innings. Model sizes, inference demand, and enterprise adoption continue to grow. Even with improvements in chip efficiency, total electricity consumption is rising faster than optimization can offset. In effect, compute demand is compounding.
For policymakers, this creates a delicate balancing act. Data centers are engines of economic growth, job creation, and digital competitiveness. But without coordinated planning across generation, transmission, and permitting, power constraints could become a brake on innovation. The regions that move fastest to modernize their power infrastructure will attract the next wave of digital investment.
For operators and investors, the message is clear. The data-center business is no longer just about racks, cooling, and fiber. It is about power strategy. Those who treat electricity as a first-order design and capital decision—rather than a downstream utility issue—will have a decisive advantage.
Where Eliakim Capital Fits
Eliakim Capital operates at the intersection of compute, power, and capital precisely where this shift is most acute. The firm supports data-center developers and AI operators with speed-to-power solutions, including modular generation systems, natural gas infrastructure, and integrated power planning that bypasses traditional utility bottlenecks. In parallel, Eliakim Capital advises later-stage companies and infrastructure platforms on capital strategy, project finance readiness, and execution discipline in a power-constrained environment.
As U.S. electricity demand enters its most significant growth phase in a generation, success will belong to those who can align compute ambition with real-world power delivery. Power is no longer a background assumption. It is the main event.