Trump's Hidden Solar Agenda: Why the Inevitable Power Stock Will Skyrocket

US electricity demand is expected to increase by 12% by 2028 due to growing data center power consumption, with Goldman Sachs forecasting a 165% jump in global data center power demand by 2030. This surge in demand could lead to an 8% annual rise in wholesale electricity prices until 2030. Meanwhile, investors are missing out on the potential benefits of solar energy, which could become a national security issue given China's dominance in solar manufacturing.

US electricity demand is expected to increase by 12% by 2028 due to growing data center power consumption, according to Penn State’s Institute of Energy and the Environment [1]. Goldman Sachs forecasts a 165% jump in global data center power demand by 2030, which could lead to an 8% annual rise in wholesale electricity prices until 2030 [2]. This surge in demand is a significant concern for grid operators and investors alike.

The rapid expansion of artificial intelligence (AI) data centers is a primary driver of this increased electricity demand. By 2023, AI data centers consumed 4.4% of electricity in the United States, a figure that could triple by 2028 [1]. Virginia, known as "Data Center Alley," is the world’s top data center market due to its robust fiber optic cable infrastructure and strategic location, consuming about 34 million megawatt hours in 2023 [1]. The state's largest utility, Dominion Energy, plans to invest $50 billion between 2025–2029 to support the growth of data centers in the region [1].

The electrification of vehicles, heating systems, and industrial processes, as well as the Biden administration's policies to eliminate fossil-fuel-based energy, are also contributing to the rise in electricity demand. However, wind and solar power cannot provide the constant 24/7 power that AI data centers require, necessitating the use of natural gas and nuclear power [1].

The increased demand for electricity is straining power grids, particularly in regions with a high concentration of data centers. Virginia, for instance, is facing capacity limits and grid volatility due to the rapid and unpredictable changes in data center workloads [1]. The PJM Interconnection, which ensures reliability in 13 states including Virginia, is developing rules to interconnect data centers and other large loads while ensuring adequate power supplies [1].

Investors are also concerned about the potential national security implications of the growing dependence on solar energy. China's dominance in solar manufacturing could lead to supply chain disruptions and vulnerabilities, making it a critical issue for the United States [2].

In conclusion, the rising electricity demand driven by data centers and other factors poses significant challenges to the US power grid and has far-reaching implications for investors and policymakers. Addressing these challenges will require a combination of technological advancements, policy reforms, and strategic investments in renewable and stable energy sources.

References:
[1] https://www.instituteforenergyresearch.org/the-grid/data-centers-drive-up-electricity-demand-causing-concern-for-grid-operators/
[2] https://www.businesswire.com/news/home/20250401864391/en/Jabil-Launches-1.6T-Pluggable-Transceiver-to-Support-Growing-Demand-for-Intra-Data-Center-and-AI-Connectivity