AI fuels electricity price surge

AI fuels electricity price surge

10 July 2025

US electricity customers are bracing for significantly higher bills as utilities invest heavily in infrastructure upgrades to support the energy demands of AI and data centres. This surge in demand necessitates substantial capital expenditure, with projections estimating a 22.3% year-over-year increase in utility spending, reaching $212.1 billion in 2025 and a record $228.1 billion by 2027.

Data centres, particularly those powering AI applications, consume vast amounts of electricity, potentially accounting for up to 12% of total US electricity demand by 2028. The rapid development of these facilities is outpacing the construction of new power plants and transmission lines, raising concerns about grid stability. Some utilities are considering implementing new rate structures specifically for high-energy users like data centres.

While AI drives up energy consumption, it also presents opportunities for improving energy efficiency and grid resilience. However, the immediate challenge lies in managing the escalating electricity demand and ensuring fair cost allocation to prevent disproportionate burdens on residential customers.

Source:ft.com

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Published on 10 July 2025
artificialintelligenceintelligenceaidatacenterselectricityutilitiesrates
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AI fuels electricity price surge