of several hundred megawatts, their impact on regional grids is becoming more pronounced. Interconnection queues authorities. Substation expansions, transformer procurement, and necessary transmission upgrades all faced lengthened across multiple balancing
Short-term energy outlook forecast
4.500
4,000
3,500
3,000
Average annual growth rate
1990 – 2005 +2.0%
2005 – 2020 +0.1%
2020 – 2026 +1.7%
2,500
2,000
1990
19 9 5
2000
2005
2010
2015
2020
2025
Figure 1 US electricity demand growth 1990-2025. Source: (US EIA, 2025d)
Electric vehicle adoption continued to expand. Domestic manufacturing accelerated in response to industrial policy and global realignment of supply chains. And most significantly, the rapid expansion of data centres supporting artificial intelligence (AI) created a new class of large, continuously operating electricity customers. Data centres became one of the most consequential drivers of growth. Hyperscale campuses increasingly approached several hundred megawatts of capacity, functioning as round-the-clock industrial loads. According to the Department of Energy (DOE) and Lawrence Berkeley National Laboratory, data centres accounted for approximately 4.4% of US electricity consumption in 2023. Under high-growth scenarios, their share could rise to between 6.7 and 12% by the late 2020s ( US DOE, 2024 ) (see Figure 2 ). This reflects not only cloud computing needs but also AI clusters that require dense racks, liquid cooling systems, and uninterrupted operation. As hyperscale campuses reach capacities
multi-year delays. Markets such as Virginia, Texas, Ohio, and the Tennessee Valley experienced growing tension between rising load and constrained transmission corridors ( BloombergNEF, 2024 ). This surge in demand created a paradox at the heart of the energy transition. Renewable generation continued to accelerate, and solar remained the fastest-growing source of new capacity. Yet the speed and profile of demand growth also reinforced the ongoing role of natural gas as a flexible, dispatchable resource that could support variable renewables, provide grid stability, and meet load growth in regions where interconnection constraints limited new renewable additions. Solar and wind in a more constrained policy environment Despite policy uncertainty, solar and wind continued to expand across the US, though under more constrained conditions than in previous years. Solar remained the dominant source of new capacity additions, but rising module import tariffs, tighter domestic content rules, and higher interest rates increased project costs ( US EIA, 2024-2025e ). Smaller developers struggled to secure equipment and financing at levels consistent with earlier assumptions. Several projects were reduced in scale or reconfigured as storage-only installations to navigate shifting credit eligibility. Wind development softened more noticeably. Onshore wind faced growing site constraints, localised opposition, and interconnection barriers. Offshore wind encountered cost inflation, supply chain bottlenecks, and challenges aligning state procurement programmes with tightened federal
600
500
6.7–12.0%
400
300
4.4%
200
1.9% of US total
100
Future scenario range
Historical
2014 0
2016
2020
2018
2022
2024
2026
2028
Figure 2 Total US data centre electricity use from 2014 through 2028. Source: (US DOE, 2024)
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