US utilities are actively engaged in mergers and acquisitions, strategically divesting assets and acquiring new ones to finance operations and prepare for a significant surge in power demand expected over the next two years. This surge is primarily driven by the increasing energy needs of data centres that support the rapid expansion of artificial intelligence. To meet this escalating demand, utilities are increasing their capital investments to build new power supplies and reinforce grid infrastructure.
Utilities anticipate that data centres will require substantial increases in energy generation, potentially necessitating a 7% to 26% boost above 2023 totals by 2028. Investment groups, including BlackRock and Blackstone, are acquiring utilities to capitalise on the rising electricity demand from data centres. These investments aim to secure energy for AI companies' data centres, but face scrutiny over potential rate increases and service impacts.
Meeting the escalating data centre demand could require over $2 trillion in new energy generation resources worldwide. In the US, funding capital investments for data centre growth may necessitate utilities to generate 10% to 19% more revenue annually, potentially increasing customer bills incrementally through 2032. Utilities are striving to balance growth, reliability, affordability and sustainability amidst this unprecedented demand.
