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Electricity demand in the United States is projected to surge by an unprecedented amount over the coming decade, according to data released today by S&P Global Commodity Insights. This rapid growth, driven by a diverse set of factors, signals an extraordinary opportunity for the American economy and electricity sector: meeting this growing demand will require an all-of-the-above energy strategy featuring efficient, economic, reliable, and rapidly deployable energy resources.
The full US National Power Demand Study will describe a critical gap between the current energy supply and future needs. It predicts U.S. electricity demand will surge by 35-50% between 2024 and 2040. This is primarily due to AI data centers and new manufacturing activity in the short-term whereas electric vehicles (EV), space-heating electrification, and broad economic growth underlie the long-term dynamics. This demand is growing faster than the supply of new energy solutions that could power it – data centers and manufacturing facilities, for example, take about three years to build versus development and construction times of typically five or more years for new power generation to come online, creating an urgent need for faster policy action on permitting and grid interconnection and an all-of-the-above energy strategy within the sector.
Regional dynamics – such as population growth, data center development and manufacturing in Texas and zero emission vehicle mandates in Western states – will dictate how the problem is best addressed, as demand grows unevenly across regions in the near term. The data describes how demand growth will initially be concentrated in the Eastern Interconnection and Texas, while later growth will be driven by the electrification of transportation and heating in population centers nationwide.
“Today’s report demonstrates the challenge of meeting our nation’s skyrocketing demand for electric power. The strategies for near-term and sustained success are simple to describe and hard to achieve. We must support and accelerate all sources of shovel-ready renewable resources, energy storage, and natural gas generation while urgently building new electricity transmission and natural gas distribution infrastructure. We must bring equal urgency to accelerate the development and deployment of new nuclear generation capacity and fossil generation with carbon capture,” said Jason Grumet, CEO of the American Clean Power Association. “However, the necessity to embrace all American resources will only occur if both parties move beyond the idea that hydrocarbons and electrons have political affiliations. It is time to join together behind a true all-of-the-above energy strategy that lowers prices, creates jobs, and supports our national security.”
The data finds that an additional (net) 730-765 GW of renewables, 160-175 GW of storage, 60-100 GW of gas, and 10-25 GW of nuclear and geothermal will be needed by 2040 to maintain grid reliability, with 8% of the nation’s energy demand being met through expected energy efficiency savings over 2024 levels of savings.
America already possesses the technology necessary to bridge this gap between demand and supply, the report will stress. It calls on government, industry, and consumers to work together on the following actions to solve the issue and, in turn, drive economic growth and strengthen security and system reliability:
- Accelerate permitting processes, including for power generation and transmission
- Reform interconnection processes
- Upgrade and expand infrastructure
- Enhance energy efficiency and encourage demand-side management and flexibility
“This report underscores the urgency clean energy buyers face in securing reliable, low-cost, carbon-free electricity,” said Rich Powell, CEO of Clean Energy Buyers Association (CEBA). “At CEBA, we are collaborating with stakeholders across industries from technology to manufacturing as well as utilities and policymakers to forge partnerships and solutions that will ensure energy buyers have all of the resources that they need to power their operations and enable our nation’s economic growth and competitiveness.”
“The S&P Demand Growth Report highlights the tremendous growth in electricity demand and the critical gaps that must be filled to meet future needs. Nuclear energy is well positioned to meet the increasing energy demand from manufacturing, AI and data center growth. Partnerships with Amazon, Microsoft, Meta, and Google highlight a broader shift among leading technology companies toward investing in nuclear energy’s unique ability to provide clean, 24/7/365 power – essential for supporting energy-intensive data center operations. Looking ahead, the next-generation nuclear technologies that will emerge because of these investments will be integral in reaching our clean energy goals. We welcome these developments and the growing commitment to nuclear energy, which will play a pivotal role in shaping the future of a reliable and clean energy grid,” said John Kotek, Senior Vice President of Policy and Public Affairs at NEI.
“Facing an unprecedented increase in electricity demand, America is provided with a golden opportunity to modernize our power sector while securing domestic leadership in cutting-edge future technologies. To meet this challenge, we need to take an ‘All Hands on Deck’ approach to electricity generation with policies that support the continued operation of today’s power sector workhorses while encouraging the development and deployment of emerging and future technologies – including renewables, nuclear, hydrogen, and natural gas – that promise to add new electrons to the grid in increasingly sustainable ways. The S&P Global National Power Demand Study highlights the extent of the electricity demand growth facing us and presents some of the tools that can be tapped to meet the moment in furtherance of national energy security,” said Marty Durbin, President of the U.S. Chamber of Commerce’s Global Energy Institute.
“This study underscores the dramatic shift in our energy landscape. Demand is poised for unprecedented growth, driven by large loads like data centers. Energy efficiency will be key to mitigating this surge and optimizing energy use across all sectors. This presents a massive opportunity for innovation, investment, and collaboration to ensure an affordable, reliable and efficient energy system,” said Sapna Dowla, AVP Policy And Research at Alliance To Save Energy.
“Our buildings, mobility systems, and manufacturing facilities are electrifying at an unprecedented pace, and NEMA’s members are at the epicenter of this rapidly changing energy system. From wire and cable to conduit, from motors to transformers, and from EV chargers to lighting, electrical manufacturers are powering innovation and reliability. To continue to meet the rising energy demand outlined in this report, we need new technologies and comprehensive, all-of-the-above energy policies for a transforming grid,” said NEMA President and CEO Debra Phillips.
The US National Power Demand Study was commissioned by the Alliance to Save Energy, American Clean Power Association (ACP), American Petroleum Institute (API), Clean Energy Buyers Association (CEBA), National Electrical Manufacturers Association (NEMA), Nuclear Energy Institute (NEI), and the U.S. Chamber of Commerce.
To read the executive summary, click here. The full report will be released in the coming weeks.
