| Data centres
AI and the unfolding energy crunch: a Schneider Electric perspective
A new report from Schneider Electric’s Sustainability Research Institute, Powering sustainable AI in the United States, builds on recent findings by the International Energy Agency (IEA) and examines how AI is set to dramatically increase electricity demand and what this means for the future of energy infrastructure. Key findings include the following: AI will drive up to 50% of US electricity demand growth by 2030. Rapid adoption of AI technologies is creating a surge in electricity demand, outpacing other electrification drivers like transport and heating. Data centre expansion is on a collision course with infrastructure limitations. Projected increases of 43–92 GW in data centre generating capacity requirements by 2030 face major hurdles from outdated grid interconnection processes, permitting delays, and supply chain bottlenecks. Infrastructure deficits could impede AI development. The “Limits to Growth” scenario warns that without grid modernisation, power scarcity will constrain innovation and global competitiveness, especially if mitigation efforts focus only on power efficiency. Unchecked demand growth risks triggering system-wide inefficiencies. In an “Abundance Without Boundaries” scenario, AI power demand could reach 500 TWh/y by 2030, which would overwhelm grid capacity, drive up consumer costs and encourage oversized, inefficient infrastructure.
An unmanaged surge could result in a national or regional energy crisis. Without significant investment in flexibility, distributed energy, and behind-the-meter solutions, power demand could exceed 173 GW by 2030, placing critical pressure on the grid and exposing seven regional operators, including MISO, PJM, and ERCOT, to reserve shortfalls by 2028.
“The rapid and widespread adoption of AI coupled with the soaring demand for electricity are fundamentally reshaping America’s energy landscape”, says Aamir Paul, Schneider Electric’s President of North America Operations. “With concerted efforts and strategic investments, we can ensure that AI’s growth is supported by a robust, efficient, and resilient energy infrastructure, paving the way for greater sustainability.”
These findings align with new data from AlphaStruxure, Schneider Electric, and Data Center Frontier based on a survey of nearly 150 senior industry professionals looking at how the US data centre sector is adapting to what Schneider calls the “unfolding energy crunch.” The survey results point to “an increasingly stark picture of an industry at the nexus between spiking demand and constrained supply,” says Schneider.
Among the main conclusions from the survey:
It’s taking longer and longer to secure additional grid capacity: 44% of respondents
indicate their average quoted utility wait times are longer than 4 years. The grid is the top concern for new data centre projects. The number one barrier slowing down data centre projects is grid constraints, with 92% seeing it as the most significant obstacle.
The industry is turning to new regions to get the power it needs. The number one region for “Plan B” power availability, if the first choice couldn’t provide timely power, is the Midwest.
Industry insiders see one region as having the fastest time to power in recent years: Mountain West.
In its pursuit of adequate power, the industry is increasingly thinking outside the grid. Six out of ten respondents reported they would deploy on-site power generation systems if they ran into concerns about power availability — the top-ranked option. “I’ve been in the power industry over 30 years, and I have never seen a moment like this,” said Juan Macias, CEO of AlphaStruxure. “The findings from this first-of-its-kind survey show the breadth and depth of the energy demand crisis, confirming what we’ve heard anecdotally from our conversations with customers. Wait times are stretching to seven years, even a decade in some cases. This survey also shows how the industry is innovating in the face of grid constraints, including on-site power generation.”
Pembina & Kineticor JV for Alberta CCGT plus data centre complex
Kineticor Asset Management has announced that Pembina Pipeline Corporation has entered into agreements for a 50% interest in the Greenlight Electricity Centre Limited Partnership, a special-purpose limited partnership with Kineticor Holdings LP #3, a portfolio company of OPTrust.
The Greenlight Electricity Centre (GLEC), located in Alberta, is a gas-fired combined cycle power generation facility to be developed in phases up to 1800 MW with carbon capture optionality coupled with significant land holdings that can accommodate a co-located 1800 MW data centre complex. The facility would be constructed on land already zoned for heavy industrial use and strategically located near transmission lines, utility infrastructure, carbon sequestration, and fibre in Alberta’s Industrial Heartland. GLEC is managed by Kineticor, which successfully developed, constructed, and currently operates the 900 MW Cascade power plant near Edson, Alberta.
“In addition to our direct investment in Greenlight, Pembina is well positioned to leverage its existing and future asset base to further support the project,” said Stu Taylor, Pembina’s Senior Vice President & Corporate Development Officer. “The proximity of our Alliance Pipeline offers a potential opportunity to provide natural gas supply to the GLEC, and the potential future development of the Alberta Carbon Grid may provide a future emissions reduction solution.”
“Alberta’s Industrial Heartland is one of the best locations in the province to facilitate a project of this magnitude given the large land base, robust grid infrastructure, and potential for decarbonisation solutions over time,” said Andrew Plaunt, CEO of Kineticor. Designed to meet increasing electricity needs driven by the province’s growing data centre industry, the GLEC will be developed in modular phases of approximately 450 MW each to scale with market demand. The power plant is currently in Stage 3 of the Alberta Electric
System Operator (AESO) interconnection process, and is progressing through permitting, design, and contracting. GLEC has the optionality to supply power to a co-located data centre or feed directly into Alberta’s power grid to support data centre loads across the province.
Greenlight says it is “well progressed” on an 1800 MW load application with the AESO on the lands surrounding the GLEC and is targeting grid interconnection in early 2027. Greenlight is actively engaging with numerous customers regarding locating their data centres on GLEC lands and/or procuring long-term power offtake from the project.
The government of Alberta has set an ambitious target of attracting $100 billion in data centre investments by 2030, encouraging developers to “bring their own power.” Pembina and Kineticor say they are committed to supporting this vision by delivering reliable and cost-effective power solutions at scale to data centres looking to locate in the province.
www.modernpowersystems.com | May 2025 | 29
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