(Bloomberg) — While data centers’ energy needs are a growing concern for the grid, the biggest user is more prosaic. Homes use far more energy to keep cool than servers. And amidst the world’s hottest year, residential use hit a record as well in 2024, reflecting the need to get a grip on the sector and keep climate targets within reach.
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American household electricity consumption grew at an accelerated clip over the past five years amid hotter and longer summers, data going back to the late 1990s from the US Energy Information Administration show. Cooling season demand spikes are getting bigger and helping homes outpace the growth in the commercial sector, which includes data centers.
Total electricity sales to residential consumers rose to an all-time high of 700.7 billion kilowatt-hours this summer, edging out the previous record of 700.2 billion set in 2022, according to the EIA data.
While the data doesn’t parse out air conditioning use, it’s clear that higher temperatures are a key driver. Typically hot states like Arizona, California and Florida sizzled through their warmest summer on record in 2024. Even typical pleasant places are becoming uncomfortable without air conditioning; Maine and New Hampshire also saw record heat last summer.
“I just got an AC and Mill Valley never needed air conditioning,” said Patty Cook of her home in a redwood-ringed town north of San Francisco. “Now people in my neighborhood are all getting heat pumps. It’s happening in these climates where we haven’t traditionally had to have air conditioning,” the senior vice president focused on flexible power resources at advisory firm ICF International added.
At the same time, people are moving to hotter places. Arizona, Texas and Florida are among the states that experienced double-digit population growth from 2010 to 2020, according to the Census Bureau. In 2020 — the last year with records available — more than two-thirds of US homes had central AC, up from 27% in 1980.
Increasingly hot weather in more places is boosting household energy demand and may ensure it stays ahead of the commercial sector, even as data centers expand their footprint. That race will continue as city-sized data centers come online and compete for energy with households increasingly electrifying everything from cooling systems to vehicles.
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While the planet reached record warmth, the most intense heat in the US was in cities. The May-to-September cooling season was the third hottest on record, said Matt Rogers, president of private forecaster Commodity Weather Group.
The covid-19 pandemic sent residential energy use into overdrive in 2020 when much of the American economy shut down and people worked from home at an unprecedented scale. That year, residential electricity sales from May through September totaled a then-record 691 billion kilowatt-hours, outstripping commercial demand by a whopping 22%.
Residential electricity usage continued to grow faster during air conditioning season than the rest of the year. Sales for the cooling season were 6% higher for the past five years versus 2015-2019, higher than the 4% growth in total for all five years, EIA data show. Conversely, electricity sales to the commercial sector rose just 0.2% in both the hot weather months and annually over the last five years.
“Ultimately weather is certainly driving things, but it’s not driving it completely,” said Jon Wellinghoff, a long-time energy regulator and founder of GridPolicy Consulting. For households switching from gas-powered furnaces and cars to heat pumps and EVs, energy demand will actually increase most in the winter. That will strain grid operators, particularly those heavily reliant on solar, because the sun isn’t up as long, Wellinghoff said. He added that more efficient cooling systems could help slow summer growth, though.
“There’s going to be tremendous growth in the residential and AI data center sector, but that doesn’t mean that it cannot be managed appropriately with the right technology and the right intelligence,” Wellinghoff said.
Households and utilities also have more options to meet summer needs, including incentivizing the use of more efficient appliances, rooftop solar, batteries and more distributed supplies located closer to communities.
“It’s going to get a lot more chaotic,” Cook said.
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