Another Reason It’s a Bad Idea to Overhype How Much Energy AI Will Need

Source: Elisa Wood | · LINKEDIN · | July 14, 2025

Forecasts about future electric demand consume our attention. But what about the electric reliability problems we face riight now?

It’s a heady time for the power industry. Electricity demand is growing for the first time in decades, partly to support the expansion of new data centers to serve AI. The utility industry is understandably excited – maybe too excited.

A study released last week by the Southern Environmental Law Center finds a “bias of overstating electric future demand” that stems from inflated expectations about data center development.

What makes them say the numbers are bloated?

First, the industry proposes many more data centers than it expects to build, the study says.

“Data center developers have incentives to duplicate requests in different jurisdictions for electric interconnection for the same facility, and industry reports indicate this has been ongoing,” says the study, prepared by London Economics International.

Meanwhile, utilities have reason to buoy the high-end demand scenarios because they justify the construction of more transmission lines and power plants, which generate revenue for them.