US energy companies pour record sums into the building power and transmission lines in order to satisfy electricity demand from data centers, and the concerns that the costs can be passed on to consumers.
According to Jefferie’s Investment Bank, the pension capital expenditure is expected to expect $ 212.1 billion in 2025, an increase of 22.3 percent and an increase of 129 percent compared to a decade ago. Investments will be predicted in 2027 of USD 228.1 billion.
“Companies invest in generation and transmission to boast the economy again,” said Julien Dumoulin-Smith, Power Utilities and Clean Energy Analyst at Jefferies.
“We have seen a relative lack of new investments in recent decades. We are now seeing a very sensible shift and should accelerate a sharp increase than the provision of data centers.”
While the growth of data centers could fuel an economic boom, companies, regulatory authorities and governments all over the country are waking up with the huge sums of capital that are necessary to build the infrastructure, and at the same time the pressure to prevent the increase in consumer bills.
If data centers pass on the costs to households and small companies, they could face their expansion plans – while Supply company With your investments, it may have to be more selective.
“The longest risk of the sector I am concerned is is the affordability. Since the pandemic, we have followed around 10 percent (in consumer energy bills) a year,” said Nicholas Campanella, analyst of Barclays’ American electricity and supply companies. “There will be a point at which stakeholders such as politicians, consumer representatives and supervisory authorities want to enter and deal with them.”
According to a report by ICF, an advisory group, will grow by 25 percent by 2050 to 2020 to 2020 to 2023 and 25 percent by 2050. According to a sample of four supply services, apartment prices are expected to increase by 15 and 40 percent between 15 and 40 percent.
A problem bypass for the provision of electricity for data centers, while you save taxpayers, is for “Hyperscale” parts such as Amazon, Microsoft and Meta to finance the investments of the supply companies through direct or through special tariffs.
“Regardless of whether we have to build a substation or create an expansion for a transmission line, we would charge our data centers directly,” said Bob Frenzel, Managing Director of Xcel Energy.
Gustavo Garavaglia, Chief Financial Officer of AES Utilities, said: “Our guiding principle is that customers cannot be damaged by creating new data centers. We have clauses in our agreements that protect us, such as minimum conditions, and they are obliged to use energy every month.”
In March, Dominion Energy, in which Virginia serves and the highest concentration of data centers in the USA, was used to create an installment structure for energy consumers that requires a lot of 25 megawatts or more and at least 14 years of contract for new customers with high loads.
It can be difficult to determine how much to build and who pays for investments. Since Hyperscalers occur at the same time as several supply companies, the demand forecasts are likely to be inflated.
“If you turn to four or five supply companies, you all have to assume that you will get the project and then put it on your plan, said Todd Snitchler, President of the Electric Power Supply Association.
Some data centers are to be built in addition to existing generational sources, which minimizes the amount of the required transmission upgrades.
One problem, however, is that this can lead to the need for a new infrastructure elsewhere, which is more difficult to take into account.
“It is not always easy to say who is responsible for what,” said Astrid Atkinson, managing director of Camus, a grid software provider.
“In theory, most people would agree that they should probably pay for it if they trigger an upgrade. However, if they have triggered an upgrade that removed one or two states, it is a more complicated conversation.”
However, some industry experts say that low prices have been responsible for assets for electricity generation in recent years.
“We had the luxury of extraordinarily affordable energy for a long time – a few years ago we were the risk of closing valuable nuclear assets, since the prices were honestly too low to support their business,” said Dan Eggers, Chief Financial Officer from Constellation Energy.
“These new customers use electricity every hour of the year. If we can do things to increase the use of the power grid, is that an advantage, right?”
