Generational Growth AI, data centers and the coming US power demand surge

Generational Growth AI, data centers and the coming US power demand surge

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Business #USPowerDemand #EnergyEfficiency #UtilityInvestment #DataCenterGrowth #AIInvestment

Generational Growth AI, data centers and the coming US power demand surge

@financepresentations5 days ago

EQUITY RESEARCH | April 28, 2024 | 10:34PM EDT
Goldman Sachs does and seeks to do business with co…

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Authors
Carly Davenport
+1 212 357-1914
carly.davenport@gs.com
Goldman Sachs & Co. LLC
Brian L…

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Our views on key questions on the coming data center/AI power surge
How significant will the powe…

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Finding the downstream beneficiaries of AI and data center growth in the
power supply chain
US po…

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Exhibit 1: After being flattish for 2015-19, we see power demand from data centers more than tripli…

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28 April 2024 6
Goldman Sachs Generational Growth

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Case study: How Dominion is handling power demand growth from data
centers in Northern Virginia
…

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from data centers increasing by 109% by 2030. The company has stated that although
the extra load …

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To address long term needs, PJM opened a competitive auction for transmission
projects in that reg…

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The rapid growth of data centers could pose similar issues for other utilities across the
US witho…

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Data demand has been growing, but until recently power demand from data
centers was flattish. Betw…

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cloud and hyperscale data centers. Annual efficiency gains averaged about 15%.
2. Mix shift towar…

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Three key assumptions will help drive data center power demand forecast.
n Data consumption outlo…

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We have seen new AI innovations increase computing speed and max power
consumption per server, rep…

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2024-26, representing a 50% CAGR in server revenues; whether demand, budgets
or neither is the con…

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n On the server supply-driven side, we apply our global Technology team’s forecast
for server ship…

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Data center power demand ex-AI
We expect continued strong growth in workload unrelated to AI. We a…

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Exhibit 16: We expect power efficiency gains at cloud/hyperscale data centers to continue, but rema…

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US power demand growth expanding to levels not seen in decades
Over the last ten years, power dema…

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Exhibit 19: Data centers contribute 90 bps to our 2.4% power demand CAGR over 2022-2030
Power dema…

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In order to size the generation capacity potential, we have considered expected
regional allocatio…

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Consistent with our LCOE model, we assume capital costs to build this generation
capacity is $1,00…

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capacity mix/factor and share of demand that requires new capacity are key drivers of
our capex fo…

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As mentioned above, in addition to incremental power generation needs to support data
center/AI d…

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distribution. The historical baseline is driven by EEI industry capex estimates, and the
forecast …

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incremental gas demand all else equal. On timing, we would expect the existing fleet to
pull more …

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We believe this growth could require the construction of ~6.1 bcf/d of new
pipeline capacity. Taki…

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Exhibit 38: We believe data center power demand growth could
require the construction of ~0.9 bcf/…

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companies on the prospect for natural gas to serve significant data center power
demand growth as…

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Exhibit 45: We see a wide range of potential pipeline capacity needs and therefore capex requiremen…

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Disclosure Appendix
Reg AC
We, Carly Davenport, Brian Singer, CFA, Neil Mehta, Brian Lee, CFA, J…

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As of April 1, 2024, Goldman Sachs Global Investment Research had investment ratings on 2,885 equit…

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Additional disclosures required under the laws and regulations of jurisdictions other than the Unit…

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there are legal, regulatory or policy constraints due to Goldman Sachs’ involvement in a transactio…

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https://www.fiadocumentation.org/fia/regulatory-disclosures_1/fia-uniform-futures-and-options-on-fu…

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Generational Growth AI, data centers and the coming US power demand surge

@financepresentations

This report highlights the expected power demand surge driven by data centers exacerbated by AI growth, forecasting significant increases in US electricity demand and associated investment needs across utilities and renewables by 2030. The findings emphasize underappreciated equity opportunities linked to this trend.

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#USPowerDemand #EnergyEfficiency #UtilityInvestment #DataCenterGrowth #AIInvestment

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