Surging Energy Demands

For nearly 20 years, the US energy supply surpassed demand due to innovations in energy efficiency and distributed generation. However, in 2022, this trend was reversed as the rise of generative AI, a surge in data centers, efforts to electrify vehicles, and shifting policies all combined to push energy demand to unprecedented levels. 

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Utilities are now preparing for demand to outpace supply, with data centers driving much of this increase. Global data center energy consumption seen in 2023 is on track to double by 2027. By 2028, annual energy generation may need to increase by up to 26% over 2023 levels to meet this growing demand. According to Bain, supporting this data center growth could require more than $2 trillion in new energy resources worldwide, with US utilities particularly impacted due to North America's leading role in new data center capacity.

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Renewable energy is expected to  play a key role in meeting this surge, as wind, solar, and other renewable sources are projected to account for the majority of new energy capacity. This is largely due to the cost-effectiveness, scalability, and sustainability of renewable energy projects. More than 90% of planned capacity additions are expected to come from renewable energy and storage resources in the next decade. Innovo is prepared to support this shift toward sustainable energy solutions, critical for utilities to balance rising demand. Renewable Energy Certificates (RECs) will play a crucial role in supporting the renewable energy build-out by helping to finance the projects needed to meet the increased demand.

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Read more here: https://www.bain.com/insights/utilities-must-reinvent-themselves-to-harness-the-ai-driven-data-center-boom/ 

https://www.bain.com/insights/us-annual-power-generation-additions-to-more-than-triple-snap-chart/  

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