News Release

Load impact imminent: Data center growth at the mercy of power supply constraints

In a grid-constrained world, anticipated impact on natural gas demand will fall short of industry expectations

byEnverus

CALGARY, Alberta (May 1, 2024) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted generative AI and energy-dedicated SaaS company, has released a collection of research focused on expected growth in data center capacity and associated power demand.

“Data centers are among the least price sensitive consumers of power, said Carson Kearl, report author and EIR analyst. “This presents an opportunity for high capital cost carbon free energy.

“Data center capacity growth will not translate one-to-one into net new load growth, operators will be on the hunt for cheap interties from current industrial consumers. Furthermore, installed data center capacity will grow by approximately 14 gigawatts from 2023 to 2030 as artificial intelligence accelerates data center capacity demand. This equates to 2 Bcf/d of incremental natural gas demand if fully served by gas-fired generation,” said Kearl.

Key takeaways from the report:

  • Data center capacity growth will not translate 1-to-1 into net new load growth due to the substitution of load from more marginal industrial power consumers (material manufacturers) and accelerated behind-the-fence generation.
  • Limiting the growth rate in computing to the fastest continuous five-year historical period (our low case) reduces EIR’s estimate to ~8 GW of capacity growth (0.9 Bcf/d increase in implied natural gas demand). EIR considers this unlikely and a conservative floor value. Accelerating the growth rate in computing to 25% faster than the fastest continuous five-year historical period (our low case) increases our estimate to ~24 GW of capacity growth (3.3 Bcf/d increase in implied natural gas demand).
  • Installed data center capacity grows by ~14 GW from 2023 to 2030 in our base case as AI accelerates data center capacity demand. This equates to 2 Bcf/d of incremental natural gas demand if fully served by gas-fired generation.
  • Estimated computing demand growth (43%) outpaces the fastest continuous five-year historical period (38%). This is partially offset by 24% annualized efficiency gains that track Nvidia chip improvements (excluding Blackwell). Capacity would need to grow 280 GW in our base case (42.3 Bcf/d) without efficiency improvements.
  • Data centers are among the least sensitive to power prices, in our view, due to the robust economics of the underlying businesses (Big Tech), the ability to pass on costs to consumers and the intense competition among participants to win the AI race.

EIR’s analysis pulls from a variety of Enverus products including Enverus Intelligence® Research, Energy Transition Research and Enverus Foundations ® Power & Renewables.

You must be an Enverus Intelligence® subscriber to access this report.

About Enverus Intelligence Research
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. Enverus is the most trusted, generative AI and energy-dedicated SaaS company, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 98% of U.S. energy producers, and more than 35,000 suppliers. Learn more at Enverus.com.

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