Power consumption in the United States is projected to reach record levels in 2025 and 2026, according to the US Energy Information Administration (EIA).

Electricity demand is expected to hit 4,193 billion kWh in 2025 and 4,283 billion kWh in 2026, surpassing the current record of 4,097 billion kWh set in 2024.

This increase is driven by data centers supporting AI and cryptocurrency, along with rising residential and commercial use for heating and transportation.

The EIA expects residential electricity consumption to rise to 1,517 billion kWh in 2025, topping the previous high of 1,509 billion kWh in 2022.

Commercial usage is projected to reach 1,474 billion kWh, and industrial use to hit 1,055 billion kWh.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ Data centers represent the most significant shift in U.S. electricity demand patterns in over a decade

After a period of relatively stable electricity consumption in the U.S., data centers are driving a significant surge in power demand.

Total data center electricity usage has increased from 58 TWh in 2014 to 176 TWh in 2023, and this trend is accelerating with AI adoption 1.

By 2028, data centers alone are projected to consume between 6.7% and 12% of total U.S. electricity, altering the nation’s energy landscape 1.

This growth contrasts with the previous decade when residential electricity consumption had plateaued since 2012, partly due to widespread adoption of energy-efficient technologies like LED lighting 2.

Looking ahead, McKinsey projects data center power demand will grow from 25 GW in 2024 to over 80 GW by 2030, potentially representing 11-12% of total U.S. power demand by the end of the decade 3.

This expansion will require more than $500 billion in infrastructure investment for data centers, creating challenges and opportunities for utilities and energy providers 3.

2️⃣ The energy transition faces a stress test as clean energy must scale alongside surging demand

The U.S. is attempting to simultaneously increase renewable energy generation while meeting significant growth in electricity consumption—a dual challenge.

Despite overall electricity demand projected to grow by almost 16% over the next five years, the EIA forecasts renewable generation will increase from 23% of the mix in 2024 to 27% by 2026, while natural gas declines from 42% to 40% 4.

This transition is occurring while data centers create concentrated pockets of high demand—with the average data center requiring over 100 MW of power, equivalent to supplying about 80,000 households 5.

The timing creates tension between immediate electricity needs and climate goals, with NPR reporting that natural gas is likely to play a role in meeting new demand, potentially locking in emissions for decades 4.

For consumers, this transition could result in electricity rates for residential customers increasing by 15% to 40% by 2030 as utilities invest in both new generation and transmission infrastructure 6.

The scale of the challenge is reflected in U.S. electricity demand projections showing growth of 25% by 2030 and 78% by 2050 compared to 2023 levels—growth rates not seen in generations 6.

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