New Silicon Valley Data Centers Will Ramp Up Electricity Use

PG&E says new facilities will add 3.5 GW of power demand to the grid.

Bloomberg News

June 13, 2024

1 Min Read
Silicon Valley data center market
Bloomberg

(Bloomberg) -- New data centers planned for Silicon Valley have the potential to add 3.5 GW of demand for electricity, PG&E Corporation said. That’s more than the output of three nuclear power plants.

The San Francisco Bay Area is one of the eight primary data center markets in the US given its proximity to the headquarters of global technology giants that include the likes of Meta Platforms, Alphabet, and Apple.

There are more than two dozen projects in the works over the next five years, executives with the California utility said during an investor presentation on Wednesday. More than half of the additional capacity will be located in the San Jose area, PG&E said. 

There are 19 unnamed commercial customers vying to complete those projects. PG&E chief executive officer Patti Poppe said the utility has enough excess capacity on its system now to meet some of the new data center demand. 

The rise of artificial intelligence has spiked demand for data centers and, as a result, electricity. Power consumption in the US is expected to pick up after nearly two decades of limited growth, leading utilities across the US to boost projections for electricity use. At least some utilities have turned to creative solutions, including keeping an old coal plant online

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PG&E said the total electricity demand on its system is expected to grow as much a 2% to 4% annually through 2040. In addition to data centers, electric cars, and increasingly electrified buildings are driving the uptick.

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