The Next Big Challenge for Utilities: Procurement in the Age of AI and Electrification

The electrification wave isn’t just coming—it’s here. After years of relatively flat electricity usage, demand is now climbing at an unprecedented pace, driven by energy-intensive technologies and sweeping electrification trends. For utility procurement teams, this isn’t a minor adjustment; it’s a fundamental shift requiring new approaches. The question isn’t if demand will surge—it’s how fast and how prepared you are.

The Scale of the Surge

Forecasts from McKinsey and the Energy Information Administration anticipate overall annual electricity demand growth between 25% and 100% over the next 25 years. That’s not incremental—it’s transformative.

Data centers are a major driver of this growth. A 2024 Lawrence Berkeley National Lab report estimates total U.S. data center electricity consumption roughly climbed from about 58 TWh in 2014 to nearly 176 TWh in 2023. Looking ahead, usage could reach 325–580 TWh by 2028, effectively doubling or tripling again in just five years.

What’s fueling this explosion? AI and cloud computing. GPU-accelerated servers for AI workloads have skyrocketed from under 2 TWh in 2017 to over 40 TWh in 2023. These workloads require massive computational power, reshaping load profiles and creating unprecedented spikes in demand.

Beyond Data Centers: Electrification Everywhere

Data centers aren’t the only new loads. Broader electrification of transportation, industry, and building heating means total U.S. power demand could rise 10–17% annually from 2024 to 2030, according to Deloitte. Electric vehicles alone are projected to drive approximately 440 TWh increase in load, reaching 468 TWh by 2040 as EV adoption climbs to 60% of new light-duty vehicles.

In regions like PJM (Mid-Atlantic), grid operators warn that data center proliferation could cause power shortages as early as 2027. The stakes are high: failure to secure adequate resources could lead to grid instability, soaring prices, and market failures.

Procurement: From Back Office to Growth Engine

For utility procurement teams, these trends translate into much larger procurement volumes—and much higher stakes. Utilities must secure significantly more generation capacity and energy supply to serve new hyper-scale users. This is a stark shift from the stagnant or declining loads of the 2010s. Procurement is no longer a routine function; it’s a strategic lever that determines whether utilities can meet demand reliably and cost-effectively.

How RFPpower Helps Utilities Win

At RFPpower, we believe procurement is becoming a growth engine for utilities. Our mission is simple: equip teams with structured processes to make smarter, faster decisions in this new era. Our platform streamlines RFP workflows, accelerates timelines, and ensures transparency—so you can secure the right resources at the right time. In an era where every megawatt matters, structured processes aren’t optional; they’re essential.

The Time to Act Is Now

The electrification and AI revolution is reshaping the energy landscape. Utilities that act decisively will lead; those that hesitate risk falling behind. Ready to future-proof your procurement strategy?