The United States is witnessing a remarkable surge in data center construction, fueled by the exponential growth of data consumption, cloud computing, and the rise of artificial intelligence (AI).

This rapid expansion has significant implications for the nation’s power grid and the recruitment landscape within the power generation sector.

This report examines the growth of data centers in the US, their power requirements, and the resulting impact on the skills and demand for power generation professionals.

Key takeaways:

Rapid Growth in Data Centers: The U.S. data center market is expected to grow from $36.1 billion in 2023 to $71.67 billion by 2034, driven by increased data consumption, cloud computing, and AI applications.
Energy Demands: Data centers are significant energy consumers, accounting for 4.4% of U.S. electricity usage in 2023, with a projected rise to up to 12% by 2028. Cooling systems and AI workloads contribute heavily to this demand.
Impact on Power Infrastructure: The rapid expansion is pressuring the U.S. power grid, increasing demand, complicating grid stability, and potentially raising carbon emissions.
Workforce Evolution: Rising demand for power generation professionals includes new roles like control engineers and technicians, with an emphasis on renewable energy, automation, and cybersecurity.

Growth of Data Centers in the US

The US data center market is experiencing rapid growth, with the market size reaching $36.1 billion in 2023 and projected to reach $71.67 billion by 2034, growing at a compound annual growth rate (CAGR) of 6.3%.

This growth is not limited to the US; there are approximately 10,978 data center locations worldwide, with the US leading the way with 5,388 data centers.

This expansion is driven by several interconnected factors:

Increased Data Consumption: The amount of data generated and consumed has skyrocketed in recent years. Data usage has increased 100-fold over the past 15 years, and more data has been created in the past three years than in all of human history. This trend is expected to accelerate further with the continued rise of AI, the Internet of Things (IoT), and other data-intensive technologies.
Cloud Computing: The increasing adoption of cloud computing by businesses and individuals has led to a surge in demand for data centers to store, process, and manage the massive amounts of data generated. Cloud service providers require extensive data center infrastructure to support their services, driving the construction of new facilities and the expansion of existing ones.
Artificial Intelligence: AI applications, particularly generative AI, require substantial computing power and storage capacity. This further fuels the demand for data centers equipped with high-performance computing infrastructure to support the training and deployment of AI models.

The growth of data centers is not uniform across the country.

While the US leads in the number of data centers, other countries are also experiencing significant growth, with Germany (522), the UK (517), and China (449) following the US.

Within the US, data center employment increased by over 60% between 2016 and 2023, with California (17%) and Texas (10%) having the highest share of data center employment.

It is also important to understand the different types of data centers that contribute to this growth:

Enterprise Data Centers: These are built and operated by individual organizations to support their specific IT needs.
Colocation Data Centers: These facilities provide space and infrastructure for multiple organizations to house their servers and other computing equipment.
Hyperscale Data Centers: These are massive facilities built by large cloud providers and technology companies to support their cloud computing and AI services.

The US is poised to see over $1 trillion invested in data centers over the next five years. This investment will further accelerate the growth of data centers and their impact on the power generation sector.

How data centers are powered

Data centers require a massive and reliable power supply to operate continuously.

They typically receive power from the utility grid at high voltage, which is then stepped down to lower voltages for use by IT equipment. The power distribution system in a data center includes several key components:

Transformers: These devices step up or step down voltage levels between the utility power feed and the data center’s electrical distribution system.
Switchgear: This equipment acts as the control center for power distribution, including devices that control, regulate, and protect the power supply.
Power Distribution Units (PDUs): PDUs distribute electrical power to multiple devices or equipment within the data center. They come in different variations, including basic, metered, monitored, and switched PDUs, each with varying levels of control and monitoring capabilities.
Power Cables and Connectors: These connect the power equipment to the IT equipment.
Power Breakers: Also known as circuit breakers, these protect electrical equipment from overcurrent or short-circuit conditions.
Uninterruptible Power Supply (UPS): UPS systems provide backup power in the event of a power outage or interruption. They typically use batteries, often lithium-ion batteries, to store energy and ensure continuous operation.
Backup Generators: When utility power fails for an extended period, backup generators, typically diesel or gas-powered, kick in to supply electricity and prevent downtime.

Data centers also utilize redundant power systems to minimize the risk of unplanned downtime.

These systems include:

UPS systems: Often use lithium-ion batteries to store power.
Cooling systems: Such as chillers with magnetically levitated centrifugal compressors (maglev systems) and free outside air.
Backup generators: Switch into action when the power source is interrupted.

In addition to the traditional alternating current (AC) power, data centers are increasingly using direct current (DC) power.

DC power is more efficient for some applications, as it eliminates the need for AC-to-DC conversion within servers and other IT equipment. This can reduce energy losses and improve overall efficiency.

Energy consumption of data centers

Data centers are major consumers of energy.

In 2023, they consumed an estimated 4.4% of total US electricity. This consumption is projected to increase significantly, potentially reaching between 6.7% and 12% by 2028.

This growth in energy consumption is driven by several factors:

Increased Computing Power: The increasing demand for data processing, driven by the growth of cloud computing, AI, and other data-intensive applications, requires more powerful servers, which consume more energy.
Cooling Requirements: Data centers generate a significant amount of heat, requiring extensive cooling systems that contribute to energy consumption.
Water Consumption: Data centers also consume significant amounts of water for cooling purposes. In 2023, data centers consumed 66 billion liters of water, with hyperscale data centers accounting for 84% of this consumption.

The increasing energy and water consumption of data centers has significant implications for the power grid and the demand for power generation professionals.

Implications for the power grid

The rapid growth of data centers is placing a strain on the US power grid. Some key implications include:

Increased Demand: Data centers require massive amounts of electricity, leading to a significant increase in demand, particularly in areas with high concentrations of data centers. This can strain existing grid infrastructure and potentially lead to power shortages or increased electricity costs.
Grid Stability: The intermittent nature of some data center loads, particularly those associated with AI and high-performance computing, can disrupt grid operations and stability. This can create challenges for grid operators in maintaining a reliable and balanced power supply.
Power Quality: Data centers can also impact power quality, particularly through the introduction of “bad harmonics” into the grid. These harmonics are distortions in the electrical current that can cause problems for appliances and other electrical equipment, potentially leading to overheating, malfunctions, and even electrical fires.
Carbon Emissions: The increased electricity demand from data centers could hinder efforts to reduce carbon emissions from fossil-fueled power plants16. While many data centers are committed to using renewable energy, the rapid growth in demand may outpace the availability of clean energy resources, potentially leading to increased reliance on fossil fuels.

To address these challenges, utilities and grid operators are exploring various strategies, including:

Grid Modernization: Upgrading and expanding grid infrastructure to accommodate the increased demand from data centers. This includes investments in new transmission lines, substations, and other grid components.
Renewable Energy Integration: Encouraging the use of renewable energy sources to power data centers. This includes facilitating the development of new renewable energy projects and integrating these resources into the grid.
Demand-Side Management: Implementing programs to manage and optimize data center electricity consumption. This includes using advanced technologies to monitor and control energy use, as well as incentivizing data centers to shift their energy consumption to off-peak hours.

Demand for power generation professionals

The demand for power generation professionals is expected to increase as data centers continue to grow.

In 2023, clean energy jobs grew by 4.2%, more than twice the overall US job growth rate. This demand is driven by:

Increased Construction: The construction of new data centers requires skilled professionals to install and maintain power generation and distribution systems.
Maintenance and Operations: Existing data centers require a workforce to operate and maintain their power infrastructure.
Grid Modernization: The modernization of the power grid to accommodate data center growth will create demand for professionals with expertise in grid integration and renewable energy technologies.
Aging Workforce: The hydropower workforce, a critical component of the power generation sector, is aging, with a significant portion of workers expected to retire in the coming decade. This creates a need for new talent to fill these roles and ensure the continued operation of hydropower facilities.

Changing skill requirements for power generation

The skills and experience required for power generation jobs are evolving due to the rise of data centers and the increasing complexity of the power grid. Some key changes include:

Data Analysis: The increasing use of data analytics in power generation requires professionals with skills in data analysis and interpretation. This includes the ability to collect, process, and analyze large datasets to identify trends, optimize performance, and improve decision-making.
Renewable Energy Expertise: The growing emphasis on renewable energy to power data centers requires professionals with knowledge of renewable energy technologies, such as solar, wind, and geothermal, as well as grid integration strategies. This includes understanding the challenges and opportunities associated with integrating variable renewable energy sources into the grid.
Automation and Controls: The increasing automation of power generation systems requires professionals with skills in automation and control technologies. This includes the ability to design, implement, and maintain automated systems that optimize power generation and distribution.
Cybersecurity: The increasing reliance on digital technologies in power generation requires professionals with knowledge of cybersecurity threats and mitigation strategies. This includes understanding the vulnerabilities of power systems to cyberattacks and implementing measures to protect critical infrastructure.
Technical Proficiency: Professionals in the renewable energy sector need a strong foundation in technical skills related to specific technologies. This includes proficiency in areas such as electrical engineering, mechanical engineering, and software development, depending on the specific role.
Soft Skills: In addition to technical skills, soft skills such as communication, problem-solving, and teamwork are becoming increasingly important in the power generation sector. These skills are essential for effective collaboration, knowledge sharing, and adapting to the changing demands of the industry.
Upskilling and Reskilling: The rapid pace of technological change in the power generation sector requires a focus on upskilling and reskilling existing workers. This includes providing training programs and opportunities for professional development to ensure that workers have the skills and knowledge needed to adapt to new technologies and evolving job requirements.

The rise of data centers summarised

The rise of data centers in the US is a significant trend with far-reaching implications for the power generation sector.

The increasing demand for electricity, the need for grid modernization, and the evolving skill requirements are creating both challenges and opportunities for power generation professionals.

To meet these challenges and capitalize on the opportunities, the power generation sector needs to invest in workforce development, attract new talent, and adapt to the changing landscape of the industry.

The growth of data centers is not just about building more facilities; it’s about building a more sustainable and resilient power infrastructure for the future.

This requires collaboration between data center operators, utilities, policymakers, and other stakeholders to ensure that the increasing demand for electricity is met with clean energy resources and that the grid is modernized to accommodate the unique needs of data centers.

Furthermore, the power generation sector needs to proactively address the evolving skill requirements by investing in workforce development programs, promoting STEM education, and attracting a diverse pool of talent.

By doing so, the industry can ensure that it has the skilled workforce needed to support the growth of data centers and the transition to a cleaner, more reliable energy future for the US.

Astute is here to help

As the power generation sector evolves to meet the challenges posed by the growth of data centers, skilled professionals are critical for maintaining and advancing power infrastructure.

Astute People Inc. specializes in recruiting talent for the power generation industry, including roles such as:

Renewable Energy Specialists
Power Systems Engineers
Control and Instrumentation Experts
Technicians for grid modernization and power distribution systems

Our expertise ensures clients find the talent they need to support both traditional power generation and cutting-edge renewable energy solutions, positioning their organizations for a sustainable future.

Looking to expand your team? Contact us today to discuss how Astute can assist you.

About the Author

Dan Bisset, Vice President of North America at Astute People Inc., brings over a decade of expertise in technical recruitment, focusing on aligning talent with transformative opportunities in the energy and infrastructure sectors. His passion for sustainable innovation and workforce development drives Astute’s mission to empower industries shaping the future of energy.

Connect with Dan on LinkedIn.