AI energy consumption strains power grid as data center demand drives costs up for manufacturers
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US manufacturers' energy costs soar because of AI data center demand
US manufacturers in many Rust Belt cities and towns are paying significantly higher electricity costs as growing energy demand from data centers strains the largest power grid operator in the United States. The resulting squeeze on profit margins for steelmakers and brick factories could further
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AI servers will consume more power than all conventional data center hardware combined by 2027 -- global data center electricity consumption set to grow by 26% this year, Gartner forecasts
Gartner projects global data center electricity use hitting 565 TWh in 2026 and topping 1,200 TWh by 2030. Global data center electricity consumption will grow 26% in 2026 to reach 565 terawatt-hours (TWh), up from 447 TWh in 2025, according to a recent Gartner forecast that names power
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AI's gas-plant boom, and the fight to stop it
Clean-energy advocates cannot outbuild the data centres, so they are going after the regulators instead The AI build-out has done something the fossil-fuel industry could not do for itself. It has set off the largest-ever construction boom in natural gas-fired power plants, the Associated Press
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What Is the Smartest Way to Power the AI Boom?
Few events in history have tested the U.S. energy grid like the AI revolution. As data centers proliferate across the country, their cumulative power demand is projected to double by next year, rising from 31 gigawatts to 66 gigawatts. In some parts of the country, the energy needs of AI are
[5]
Energy is AI's natural home - but right now, it's fumbling
Data centre electricity demand is set to roughly double by 2030, and AI is both a driver of that demand and one of the best tools available to manage it. When governments and technology leaders convened in Geneva in July for the first session of the UN Global Dialogue on AI Governance, one of the
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AI data centres are driving up power bills at America's Rust Belt factories
Capacity charges have soared across the PJM grid, and manufacturers from Ohio to Pennsylvania are paying for the AI boom. For years, electricity costs at the Belden Brick Company in Sugarcreek, Ohio, barely moved. Last year they jumped by 90%, driven largely by the data centres multiplying across
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Stymied datacentre projects threaten global AI revolution
Large-scale datacentre projects around the world are being challenged or cancelled, as infrastructure's energy demands ramp up Datacentre planning proposals face all kinds of hurdles, from securing energy supply to high construction costs. But the 2,000 acre Prince William Digital Gateway site in
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'The challenge is no longer only how much power is needed, but whether it can be delivered reliably': Report finds AI data centers are draining more power than the grid can provide
* Electricity demand is now growing faster than energy suppliers can keep up with * Volatile AI workloads cause unpredictable peaks and troughs in demand * AI could actually help predict, despite also being the cause With three in four (77%) electricity execs now believing that data center
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Is AI the energy technology the world has been waiting for?
AI could become the technology that finally makes the grid work the way it always should have. The most consequential energy technology of the coming decade may not look like a power plant at all. It may look like an 'AI factory' or what NVIDIA's CEO, Jensen Huang, calls the new generation of
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AI data center servers predicted to glug more power than 'conventional servers' by 2027
Data centres require a lot of energy to run. It's why it's so frustrating to hear AI's major players attempt to play a game of misdirection by making claims along the lines of a single LLM prompt requiring but a fourteenth of a cup of tea. Worse still, as big tech continues to build out its AI
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Why AI's energy future depends on power from space
Global electricity demand from data centres will more than double by 2030, according to the International Energy Agency (IEA). New analysis from United Nations University suggests that if data centre growth continues on its current trajectory, power demand could approach three times the combined
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The world's biggest battery maker on AI's energy demand
Engaging the whole system and co-designing from the outset are increasingly regarded as key to long-term success. For many leaders, businesspeople and policy-makers worldwide, the future of AI, including how it will be powered, is one of uncertainty, high costs, and some degree of anxiety. Pushing
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AI's energy appetite is reshaping the electric grid
The five largest technology companies on earth spent more than $400 billion on capital expenditure in 2025, most of it toward AI. Chips, data centers, servers, and software pipelines absorbed capital at a pace the technology industry had never seen. The constraint holding the whole machine back has
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Energy for AI - The Korea Times
Korea is in the midst of a stock market frenzy. Stock prices are influenced by a company's future value, and Korea's market is heavily weighted toward semiconductor firms whose share prices are shaped by global artificial intelligence (AI) investment. This is why investors in the Korean market are
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Data centers powering AI are consuming electricity at unprecedented rates, with global consumption hitting 565 TWh in 2026. US manufacturers in the Rust Belt are paying significantly higher electricity costs as data center demand strains the aging power grid. Some factories report energy bills jumping from $1,600 to $12,000 monthly, while steel companies face tens of millions in additional annual costs.
AI Energy Consumption Reaches Critical Levels as Grid Struggles
AI energy consumption is accelerating at a pace that threatens to overwhelm existing infrastructure, with global data center electricity consumption projected to reach 565 terawatt-hours (TWh) in 2026, up 26% from 447 TWh in 2025, according to Gartner forecasts
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. The surge in AI data center electricity demand is creating a cascade of consequences across the energy sector, from soaring energy costs for traditional industries to mounting pressure on utilities to build new generation capacity. By 2030, data center electricity consumption is expected to exceed 1,200 TWh, with AI-optimized servers accounting for nearly half of all data center power usage2
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Source: Tom's Hardware
The strain on the aging energy grid has become particularly acute in regions served by PJM Interconnection, the largest power grid operator in the United States covering 13 states. PJM's capacity prices have skyrocketed from $28.92 per megawatt-day in 2024 to $329.17 per megawatt-day in 2026, reflecting the intense competition for limited power resources
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. The grid operator forecasts that electricity demand will surpass available supply by 6.6 gigawatts starting in 2027, equivalent to more than six nuclear power plants1
.US Manufacturers Bear the Brunt of AI Boom Energy Demands
US manufacturers concentrated in Rust Belt states are experiencing the most immediate impact of rising data center demand. The Belden Brick Company, a 141-year-old Ohio manufacturer, has seen its monthly electricity bills surge from $1,600 to $12,000 due to higher capacity charges
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. For steelmakers, the situation is even more severe. The Steel Manufacturers Association warns that US steel companies are paying tens of millions of dollars in higher power costs annually, with electricity accounting for 20 to 40 percent of total production costs1
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Source: Ars Technica
Ohio-based steelmaker Metallus reported a 70 percent jump in electricity costs since 2024, translating to an extra $15 million in annual energy expenses
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. The irony is stark: while data center construction requires an estimated 1 million tons of steel per year, the energy demands of those same facilities are undermining the economic viability of steel production itself. Some manufacturers are raising prices to offset costs or considering relocation, while steel executives warn that production outages could become more likely if local power grids are overwhelmed1
.AI Servers Power Consumption Set to Overtake Conventional Infrastructure
The composition of data center energy use is shifting dramatically as AI servers power consumption accelerates. AI-optimized servers consumed approximately 95 TWh worldwide in 2025 and are projected to draw 175 TWh in 2026, representing an 84% increase
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. By 2027, AI-optimized hardware will consume more electricity than conventional servers for the first time, with AI servers expected to reach 258 TWh while conventional servers remain relatively flat at around 200 TWh2
.In the United States, which accounts for approximately 204 TWh of the 565 TWh global total in 2026, dedicated AI data centers consume roughly 68 TWh, or one-third of the national data center electricity consumption
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. Gartner analyst Linglan Wang noted that "power availability is now the binding constraint on AI expansion," making data center power security "the new battle ground for scaling and protecting margins in the global AI race"2
.Related Stories
Natural Gas Plants Surge as Clean Energy Goals Collide with AI Reality
The AI build-out has triggered the largest-ever construction boom in natural gas-fired power plants, according to the Associated Press, accomplishing what the fossil-fuel industry could not achieve on its own
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. Aging coal plants are being kept operational past planned retirement dates as utilities struggle to meet the immediate power needs of data centers. The arithmetic is straightforward but challenging: some data centers consume more electricity than a mid-size city, and renewable energy infrastructure cannot be built at the required speed3
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Source: TechRadar
This reality has sparked a regulatory battle as clean energy advocates push back. Several states including New York, Michigan, Oregon, and Minnesota have passed or are considering legislation requiring large data centers to meet renewable energy benchmarks, with targets reaching 90% clean energy by 2040
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. Michigan tied compliance to financial incentives, requiring hyperscale data centers to reach 90% clean energy within six years to maintain a lucrative sales tax exemption3
.However, Bob Jenks of the Oregon Citizens' Utility Board offered a candid assessment: the 2040 climate goals target was already difficult to meet with data centers, and difficult to meet without them
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. More than 75 data center projects worth $130 billion were blocked in the first months of 2026 amid opposition over power and water costs, with some operators turning to on-site gas generators to bring capacity online without waiting for grid reliability improvements2
.Competing Solutions Emerge for Powering the AI Boom
Experts and industry leaders are pursuing diverse strategies for powering the AI boom. Enhanced geothermal systems offer one promising path, providing baseload, carbon-free energy with 24/7 reliability that wind and solar cannot match without massive battery storage
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. Hyperscalers are making substantial commitments to nuclear power, with Meta signing deals for more than 6GW of nuclear capacity to supply upcoming data centers, though these projects won't come online until 2028 or later2
.Regulatory changes are creating new pathways for tech companies to build their own generation. Google's deal with NV Energy, connecting 115 megawatts of geothermal systems in Nevada and 1,900 megawatts of wind, solar, and storage in Minnesota, is seen as the first of its kind, with similar arrangements approved or pending in eight more states
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. The pitch to utilities is commercial: they gain long-term customers who pay to expand the power grid rather than building standalone generation.The International Energy Agency finds that the energy sector should be AI's natural home, generating more operational data than almost any industry
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. Yet the sector is struggling with weak digital skills and limited data interoperability, with information locked in proprietary silos. India's Ministry of Power launched the India Energy Stack in 2025, a digital public infrastructure modeled on the country's identity and payments systems, while the European Commission published its Strategic Roadmap for Digitalisation and AI in the Energy Sector in June 20265
. These initiatives recognize that sustainable energy systems require not just new generation capacity but fundamental changes in how energy data is shared and managed.References
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