DoE: ‘Portfolio Approach’ Key to Solving the Data Center Energy PuzzleDoE: ‘Portfolio Approach’ Key to Solving the Data Center Energy Puzzle

The US Department of Energy’s (DoE) latest report on US data center energy use reveals a significant rise in electricity consumption by data centers, driven by the rapid adoption of AI hardware and expanded cloud services.

According to the report, published on December 20, data center electricity usage climbed from 58 terawatt-hours (TWh) in 2014 to 176 TWh in 2023, accounting for 4.4% of total US electricity consumption.

This demand is expected to grow exponentially, with projections ranging between 325 TWh and 580 TWh by 2028, potentially representing 6.7% to 12% of total US electricity usage.

The report, produced by Lawrence Berkeley National Laboratory, attributes this surge to the increasing use of GPU-accelerated servers, particularly for AI workloads, as well as broader trends in cloud services and data-intensive applications.

Paving the Way for Long-Term Growth

Between 2018 and 2023, annual data center energy consumption grew at an accelerated compound annual growth rate (CAGR) of 18%.

Dr Avi Shultz, director of the DoE’s industrial efficiency and decarbonization office, told Data Center Knowledge addressing rising electricity demand requires a portfolio approach.

“This utilizes a mix of energy sources to meet near-term growth with commercially available technologies, while also paving the way to support long-term growth through grid optimization efforts,” he said.

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These solutions span the entire power system, from new generation and onsite storage technologies to enhancing and expanding the transmission system and maximizing the efficiency and flexibility of demand resources.

Data centers now consume more than 4% of US electricity – projected to rise up to 12% by 2028

The report predicts growth rates of 13% to 27% from 2023 to 2028, depending on variables such as cooling system efficiency, GPU demand, and operational practices.

Innovations like liquid-based cooling and shifts from evaporative systems are cited as critical efficiency strategies.

Dr Shultz noted DoE supports several efforts to improve energy and water efficiency of data center cooling systems.

The ARPA-E COOLERCHIPS program, for example, is advancing cooling technologies from chip level to facility level through the advancement of technologies such as liquid immersion cooling, which Dr Shultz said could reduce total electric consumption by as much as a third.

Efficiency Gains, Emerging Challenges

Historically, the data center industry achieved near-flat energy consumption growth from 2010 to 2016, due to efficiency strategies like improved cooling, server utilization, and reduced idle power.

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However, the rise of AI and cryptocurrency applications has reversed this trend, the report states.

Accelerated servers have driven a doubling of energy demand since 2017, underscoring the need for new approaches to energy efficiency.

The report identifies several key areas for improvement, including benchmarking initiatives, collaboration with utilities, and advancements in clean energy technologies such as scalable nuclear power and real-time renewable energy solutions.

These measures aim to balance the rising demand with environmental sustainability.

The DoE also advocates for greater transparency in data center energy use to inform future planning and policy.

“There isn’t going to be one silver bullet to solve this challenge for the US. We need an all-of-the-above energy solution, and nuclear is one component of the mix of energy sources needed to meet this growing demand,” Shultz said.

He explained AI and data center load growth presents an opportunity for advanced nuclear sources with requirements for 24/7 power.

“Nuclear generates carbon-free electricity, provides resilient power that complements a wide variety of other energy sources, has low land-use requirements, and enables grid flexibility,” he said.

Data Centers Beyond 2028

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The rapid growth of data center energy consumption is expected to persist beyond 2028, fueled by the continued adoption of AI technologies, electric vehicle infrastructure, and the electrification of industries.

As data centers become an increasingly significant portion of US energy demand, the report says stakeholders must address both immediate challenges and long-term infrastructure needs.

Investment in new power infrastructure, innovative risk-sharing models, and emerging technologies will be essential to ensuring data centers remain efficient and sustainable.

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Shultz emphasized the current surge presents an opportunity to develop leadership in scaling economy-wide electricity infrastructure, aligning the data center sector with broader energy transition goals.

“Programs like our Grid Resilience Innovation Partnership, our new Supercharged program, and our technical assistance partnerships all help DoE bring together the community of stakeholders, so that they can effectively do this planning in a coordinated and organized fashion,” he said.