Watts Behind the AI Revolution: Impacts of Data Centers on Energy Operations

This project examines the economic impacts of rapidly deployed AI data centers on U.S. electricity systems. As data centers are projected to consume nearly 12% of U.S. electricity by 2030, their large, concentrated, and inflexible demand poses challenges for local power grids. The study provides causal evidence on how data center deployment affects retail electricity prices and utility profits. Using detailed data on data center locations, electricity rates, and utility revenues, the analysis applies Difference-in-Differences and Synthetic Control methods. It also explores regional heterogeneity and assesses whether future data center investments align with grid readiness and cost of electricity.

Vishrut Rana

Ph.D. Candidate, Wharton School

Vishrut Rana is a Ph.D. candidate in Operations Management at the Wharton School at the University of Pennsylvania. His research focuses on emerging topics in clean energy.

Serguei Netessine

Senior Vice Dean of Innovation & Global Initiatives, Wharton

Serguei Netessine is Senior Vice Dean for Innovation and Global Initiatives and Dhirubhai Ambani Professor of Innovation and Entrepreneurship at Penn’s Wharton School.

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