It is hard to get your head around how stupendously large an electricity user a 2-5 gigawatt data center represents. A 5 gigawatt data center consumes on the order of 40 million megawatt-hours of electricity per year, as much electricity as the ENTIRE STATE of Nevada or Kansas!
The cost of providing electricity in America’s largest power market will hit a record high owing to soaring demand from artificial intelligence data centres and delays in building new power plants, raising energy prices for consumers.
Grid operator PJM, which covers 13 states and Washington DC, said on Tuesday it procured energy supplies for $329.17 per megawatt day, a 22 per cent increase compared with the previous year. The organisation will pay power producers $16.1bn to meet its energy needs from June 2026 to May 2027, a 10 per cent increase compared with the previous year.
The operator said it expected a 1-5 per cent rise for customers in their energy bills, depending on how utilities and states passed on costs. “It’s unpleasant for ratepayers,” said Timothy Fox, a managing director at ClearView Energy Partners. “Higher auction prices will result in higher bills for customers.” PJM sets prices at an annual capacity auction where power suppliers bid to provide the region’s projected demand.
Earlier this year, PJM and some state governments took steps to try to keep power prices lower after last year’s capacity auction delivered a $269.92 per MW-day price — a more than 800 per cent increase from 2023.