As electricity demand from data centers, electrification and clean energy manufacturing increases and the number of outages jumps, states and utilities are integrating behind-the-meter distributed energy resources (DER), microgrids and flexible loads, along with new compensation mechanisms and rate designs, according to the 2025 Power and Utilities Industry Outlook, a new report from Deloitte Consulting.
Data center electricity demand expected to soar
According to the Deloitte analysis, by 2030, electricity demand from data centers is projected to rise to about 515 terawatt-hours (TWh) to 720 TWh, up from about 180 TWh to 290 TWh in 2024 — a 15% to 17% compound annual growth rate.
Along with increased demand for electricity, the number of weather-related outages has jumped. Between 2000 and 2023, 80% of all major power outages were caused by severe storms, wildfires and extreme heat, the report said.
Utilities can address these challenges by adopting DERs to provide energy efficiency demand response, power generation, energy storage and resilience to the grid. And utilities can create tariffs that aim to accelerate investment in clean energy resources.
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