Embracing Disruption
Power play: how AI and electrification are driving a new energy era
The United States appears to be entering a new era of electricity demand growth, reversing two decades of stagnation.
The end of stagnation
US average residential electric monthly bill
Source: Jeffries Research, 2025
Data centres and AI: The primary driver
Data centre electricity consumption is forecast to quadruple from 17 GWh in 2024 to 66 GWh by 2035, representing 12% of total U.S. energy demand.
AI-driven data centres are the primary driver, with leading AI models drawing up to 20MW per grid connection and potentially consuming 50 GWh in a single training run. Global data centres consumed 371 terawatt-hours (TWh) of electricity in 2024 (1.4% of global demand), with projections rising to 935 TWh by 2030 (3% of global demand) and 1,600 TWh by 2035 (4.5%). AI data centres can consume up to 300% more power than traditional data centres, with new facilities being built at capacities ranging from 100 MW to 1,000 MW equivalent to the load of 80,000 to 800,000 homes. A ChatGPT query uses about 2.9 Wh of electricity, roughly 10 times the energy of a standard Google search (0.3 Wh), illustrating the much higher energy intensity of AI inference compared to traditional search workloads.3
Investment opportunities in utilities and grid infrastructure
U.S. power grid capital expenditure reached a record $95 billion in 2024, the highest globally, driven by clean power targets, demand growth, and data centre deployment.4 Solar remains the cheapest new power source, with Bloomberg NEF forecasting 57 GW more utility-scale solar to be built from 2025-2035 than previously expected. Power distribution and thermal management are the fastest-growing product segments to capture nearly 20% annual growth over the next three years.5 Renewables are expected to remain the preferred generation source for new capacity, representing the lion share of new capacity additions due to faster build times and lower costs.
Critical minerals and materials
Copper faces the most acute long-term supply deficit among transition metals, with energytransition-related demand expected to more than double from 9.9 million metric tons in 2025 to 21.4 million metric tons by 2050. Critical minerals such as copper and lithium are expected to face significant supply deficits by 2035, with 20-40% shortfalls for copper and 30-60% for lithium. U.S. grid infrastructure investment increased by 160% from 2003 to 2023, with copper demand rising due to its superior electric conductivity for grid expansion.6
Investors looking to benefit from rising electricity demand can pursue multiple strategies:
- Infrastructure and utilities: Rising capital expenditure requirements generally support regulated rate base growth. Utilities with constructive regulatory environments may earn steady, inflation-linked returns.
- Renewable energy and storage developers: Medium-term deployment remains robust, although permitting remains an ongoing constraint. Battery storage and hybrid renewable projects represent expanding niches.
- Transmission and grid modernization: Engineering services, construction, and grid technology manufacturers stand to benefit from long investment cycles.
- Industrial equipment and electrification technologies: Firms producing transformers, switchgear, inverters, and power electronics may face persistent excess demand.
- Upstream materials and advanced manufacturing: Critical minerals, metals processing, and domestic manufacturing capacity may gain pricing power in periods of constrained supply.
- Software and smart-grid platforms: Digital optimization and real-time control software may become indispensable.
Conclusion
1 Jefferies LLC & Energy Information Administration.
2 Bloomberg NEF Sustainable Energy in America 2025.
3 Bloomberg NEF US Data Centre Power Demand Outlook.
4 JP Morgan Research Power Equipment: Super-cycle: A beginning or and end? 2026 outlook.
5 Bloomberg NEF Energy Transition Investment Trends 2025.
6 Bloomberg NEF Transition Metals Outlook 2025.
