Commercial Electricity Demand Increases in States with Growing Computing Facilities: EIA

Growth in commercial electricity demand during 2023 was more evident in states going through speedy development of large-scale computing facilities such as data centers, according to a June 28 report published by the U.S. Energy Information Administration.

Electricity consumption across the U.S. commercial sector has improved since the COVID 19 pandemic, with yearly U.S. electricity sales to commercial clients increasing by more than one percent in 2023 to 14 billion killowatthours (BkWh) compared to levels in 2019.

Virginia and Texas experienced the highest electricity demand growth during 2023, increasing by 14 BkWh and 13 BkWh respectively. Commercial electricity demand in the 10 states with the highest electricity demand growth rose by 10 percent or a total of 42 BkWh between 2019 and 2023. On the other hand, electricity demand in the other 40 states across the U.S. declined by 3 percent or 28 BkWh through the four-year period.

Electricity demand has risen the most in Virginia, with Dominion Energy Virginia, the principal electricity firm in the state being a key driver of demand growth. The state is now a key hub for data centers, with 94 new facilities connected since 2019. Electricity demand has also increased significantly in Texas, due to comparatively low costs of power and land have led to a large concentration of data centers and cryptocurrency mining activities. Contrastingly, states such as California, New York, and Illinois have seen commercial electricity demand decline or be flat compared to 2019.

The agency has revised their forecasts higher for commercial electricity demand through 2025, on the back of projections that regional electricity demand will increase. The agency projects commercial usage in the South Atlantic to rise by 5 percent during 2024 and 2 percent in 2025. Moreover, the agency expects commercial electricity demand to increase by 3 percent during 2024 and 1 percent next year.

Due to data center developments, the agency projects U.S. sales of electricity to the commercial sector to increase by 3 percent in 2024 and 1 percent in 2025.