By Brad Plumer
Something unusual is happening in America. Demand for electricity, which has stayed largely flat for two decades, has begun to surge.
Over the past year, electric utilities have nearly doubled their forecasts of how much additional power they’ll need by 2028 as they confront an unexpected explosion in the number of data centers, an abrupt resurgence in manufacturing driven by new federal laws, and millions of electric vehicles being plugged in.
Many power companies were already struggling to keep the lights on, especially during extreme weather, and say the strain on the grid will only increase. Peak demand in the summer is projected to grow by 38,000 megawatts nationwide in the next five years, according to an analysis by the consulting firm Grid Strategies, which is like adding another California to the grid.
“The numbers we’re seeing are pretty crazy,” said Daniel Brooks, vice president for integrated grid and energy systems at the Electric Power Research Institute, a nonprofit organization.
In an ironic twist, the swelling appetite for more electricity, driven not only by electric cars but also by battery and solar factories and other aspects of the clean-energy transition, could also jeopardize the country’s plans to fight climate change.
To meet spiking demand, utilities in states such as Georgia, North Carolina, South Carolina, Tennessee and Virginia are proposing to build dozens of power plants over the next 15 years that would burn natural gas. In Kansas, one utility has postponed the retirement of a coal plant to help power a giant electric-car battery factory.
Burning more gas and coal runs counter to President Joe Biden’s pledge to halve the nation’s planet-warming greenhouse gases and to generate all of America’s electricity from pollution-free sources such as wind, solar and nuclear by 2035.
“I can’t recall the last time I was so alarmed about the country’s energy trajectory,” said Tyler H. Norris, a former solar developer and expert in power systems who is now pursuing a doctorate at Duke University. If a wave of new gas-fired plants gets approved by state regulators, he said, “it is game over for the Biden administration’s 2035 decarbonization goal.”
Some utilities say they need additional fossil fuel capacity because cleaner alternatives such as wind or solar power aren’t growing fast enough and can be bogged down by delayed permits and snarled supply chains. While a data center can be built in just one year, it can take five years or longer to connect renewable energy projects to the grid and a decade to build some of the long-distance power lines they require. Utilities also note that data centers and factories need power 24 hours a day, something wind and solar can’t do alone.
Yet many regulated utilities also have financial incentives to build new gas plants, since they can recover their costs to build plants, wires and other equipment from ratepayers and pocket an additional percentage as profit. As a result, critics say, utilities often overlook, or even block, ways to make existing power systems more efficient or to integrate more renewable energy into the grid.
“It is entirely feasible to meet growing electricity demand without so much gas, but it requires regulators to challenge the utilities and push for less-traditional solutions,” Norris said.
The stakes are high. If more power isn’t brought online relatively soon, large portions of the country could risk blackouts, according to a recent report by the North American Electric Reliability Corp., which monitors the health of the nation’s electric grids.
“Right now everyone’s getting caught flat-footed” by rising demand for electricity, said John Wilson, a vice president at Grid Strategies.
Why demand is spiking
For much of the 20th century, America’s electricity use increased steadily and utilities built plenty of coal, gas and nuclear plants in response. But starting in the mid-2000s, demand flattened. The economy and population kept expanding, but factories, lightbulbs and even refrigerators became much more energy efficient.
Now demand is rising again, for several reasons.
The growth of remote work, video streaming and online shopping has led to a frenzied expansion of data centers across the nation. The rise of artificial intelligence is poised to accelerate that trend: By 2030, electricity demand at U.S. data centers could triple, using as much power as 40 million homes, according to Boston Consulting Group.
In Northern Virginia, one of the nation’s largest data center hubs, at least 75 facilities have opened since 2019 and Dominion Energy, the local utility, says data center capacity could double in just five years.
At the same time, investment in U.S. manufacturing is hitting a 50-year high, fueled by new federal tax breaks to lift microchip and clean-tech production. Since 2021, companies have announced plans to spend at least $525 billion on factories for semiconductors, batteries, solar panels and more.
In Georgia, where dozens of electric vehicle companies and suppliers are setting up shop, the state’s largest utility now expects 16 times as much growth in electricity demand this decade as it did two years ago.
Millions of Americans are also buying plug-in vehicles and electric heat pumps for their homes, spurred by recent federal incentives. In California, one-fifth of new cars sold are electric, and officials estimate that EVs could account for 10% of power use during peak hours by 2035.
On top of that, record heat fueled by global warming is spurring people to crank up air-conditioning, causing summer demand in Arizona and Texas to rise faster than forecast.
Many worry the grid won’t keep up.
PJM Interconnection, which oversees the nation’s largest regional grid, stretching from Illinois to New Jersey, is now expecting an additional 10,000 megawatts of demand by 2030 that wasn’t forecast last year. That’s akin to adding another New York City to the system.
“To see that come on all of the sudden, even for a system as big as ours, that’s significant,” said Ken Seiler, who leads system planning for PJM.
Finding enough power could be a challenge, since PJM’s process for connecting renewable energy projects to the grid has been afflicted by delays. Utilities in PJM have been preparing to retire roughly 40,000 megawatts of mostly coal, gas and oil-burning power plants this decade as states seek to transition away from fossil fuels. PJM has already approved an additional 40,000 megawatts of mostly wind, solar and batteries as partial replacements. But many of those projects have been stalled by local opposition or trouble getting vital equipment like transformers.
“We have a huge concern about that,” Seiler said. “Folks aren’t building.”
Nationwide, just 251 miles of high-voltage transmission lines were completed last year, a number that has been declining for a decade.