More than 3.5GW of data center capacity is due to come online in California between now and 2029. Around a third of the requested capacity was from one customer.
First reported by DCF, a June investor update from Pacific Gas and Electric Company (PG&E) outlines the massive data center development pipeline for northern and central California.
In the update, PG&E notes that the areas around San Francisco and Silicon Valley – long one of the largest data center markets – continue to see high demand.
In San Jose, more than 1.6GW of data center capacity has been requested from 2025 to 2029 from 11 customers. These range from 10MW up to 600MW. Around 100MW of capacity has been requested for 2025 alone.
In Hayward, 975MW of data center capacity has been requested by four customers – though 800MW of that is for one customer and due in 2028.
Fremont saw 230MW, Gilroy and Milpitas 210MW, San Francisco 70MW, Sunnyvale 100MW, Santa Clara 100MW, and Richmond 35MW.
The companies making these requests aren’t named and instead have been given numbers. Customer 1 requested more than 1.3GW across five locations, all coming live in 2028. The next largest customer (Customer 3) requested 500MW in one application, set to come online between 2025 and 2029.
Overall, PG&E said it projects its load to grow between 2-4 percent between 2023 and 2040 – equivalent to around 144TWh – with data centers responsible for 0.5-1.5 percent of that growth. Electric vehicles are expected to constitute around 1.25-2 percent growth during that time.
The utility added that between $500 million and $1.6 billion in capital is needed to support the data center load increases.
CBRE has previously said many substation sites around Silicon Valley will not be energized until 2028-2029 and their coming online may be delayed due to the grid capacity being maxed out in Santa Clara.
Digital Core REIT – a listed REIT sponsored by Digital Realty, has previously noted power challenges in California. In a Q1 2023 update, the company warned that in Northern California, “the local utility provider has indicated that incremental power allocations for data center development will be on hold through 2028.”
Silicon Valley Power, one of the two utility providers, reports many projects will only receive a maximum of 2MW, limiting future growth.
PG&E was also said to be slow with the delivery of new power due to a “lack of supply and increase in consumption” of existing inventory. The company's earnings report said: “Power remains a prominent issue with current estimates for new capacity approximated to deliver in 2028.”
Last year, Silicon Valley Power said it expects data center load to almost double by 2035. Data centers are already the single largest load for the Californian utility, which aims to invest heavily in renewable power – including geothermal – and battery storage to try and meet the sector’s demand.
