NCPA - National Center for Policy Analysis

Modern Economy Straining Electric Demand

July 28, 2000

Experts report that high-tech industries are now the single largest source of new demand for electricity. Mark Mills, co-editor of the Digital Power Report, estimates that new-economy sectors -- such as computers, semiconductors, telecommunications, information storage and Internet-related companies -- account for 12 percent to 14 percent of the country's power consumption, more than demands of the steel and paper industries combined.

Across the United States, thousands of computer servers and those they serve are placing huge demands on an already overloaded electricity generating and supply system. Electric utilities are straining to satisfy demand this summer.

  • Commonwealth Edison in Chicago says the typical data center there requires 10 times the power of a conventional office building.
  • In other words, a single data center will use as much electricity as six 40-story office buildings.
  • Roughly, another 20 data centers are already planned for the Chicago area.
  • If they reach full capacity, their annual power consumption will almost equal the output of a small nuclear reactor.

Experts say there are too few power plants and too many power-hungry customers to be supplied. For example, the last big utility power plant in California opened in the mid-1980s. In June, the San Francisco Bay-area power grid of Pacific Gas & Electric was near collapse, and the utility cut power to nearly 100,000 customers.

Source: Nelson D. Schwartz, "A Long Hot Summer," Fortune, August 14, 2000.


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