U.S. Power Consumption and Generation Forecasts for 2025 and 2026

The U.S. Energy Information Administration (EIA) has projected that electricity consumption in the United States will reach unprecedented levels in 2025 and 2026. According to the EIA's Short-Term Energy Outlook (STEO), power demand is expected to rise to 4,187 billion kilowatt-hours (kWh) in 2025 and further to 4,305 billion kWh in 2026, surpassing the previous record of 4,097 billion kWh set in 2024. This surge in demand is largely attributed to the increasing energy needs of data centers, particularly those supporting artificial intelligence and cryptocurrency operations, as well as a shift in residential and commercial energy usage towards electricity and away from fossil fuels.

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In response to the rising demand, the EIA has also revised its forecasts for electricity generation. The agency anticipates a growth rate of 2.3% in 2025 and 3.0% in 2026, an increase from earlier estimates of 1.5% per year. This growth is expected to be driven by various energy sources, with utility-scale solar projected to contribute significantly, generating an additional 72 billion kWh in 2025 compared to 2024. However, natural gas generation is forecasted to decline by 3% in 2025 due to high fuel prices and increased competition from coal and renewables.

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The EIA's outlook indicates a gradual shift in the energy mix. The share of natural gas in power generation is expected to decrease from 42% in 2024 to 40% in 2025 and 2026, while coal's share is projected to rise slightly from 16% to 17% in 2025 before returning to 16% in 2026. Renewable energy sources are anticipated to increase their contribution, with renewables expected to account for 25% of generation in 2025 and 26% in 2026, up from 23% in 2024.

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Despite the optimistic forecasts, there are concerns regarding the reliability of renewable energy sources. The staff of the Virginia State Corporation Commission has expressed skepticism about the ability of renewable projects to meet the energy demands driven by data centers. They noted that renewable energy alone may not suffice, advocating for the addition of natural gas resources to ensure reliability, particularly during peak demand periods.

SCC Staff Sees Need for More Gas Because Wind Will “Collapse”

While the EIA's projections indicate robust growth in renewable energy, some analysts caution that the actual deployment may face significant hurdles. Issues such as permitting delays, local opposition, and inflationary pressures on installation costs could hinder the pace of renewable energy adoption. Furthermore, the EIA's forecasts for natural gas generation contrast with the anticipated decline in natural gas production, raising questions about the overall energy supply landscape.

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• “Electricity generation has been growing rapidly this year as a result of growing demand for power from data centers and industrial customers,” — EIA

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• “there is reasonable support for the claim that the Company is currently resource deficient, and that the Company will be significantly more resource deficient if the projected data center load growth materializes in whole or in part.” — Andrew T. Boehnlein, Public Utility Division Manager, Virginia SCC

SCC Staff Sees Need for More Gas Because Wind Will “Collapse”

As the U.S. approaches these record consumption levels, utilities are expected to continue investing heavily in grid infrastructure and energy generation capacity. The evolving energy landscape will require ongoing assessments of energy policies and market dynamics to ensure that supply can meet the increasing demand driven by technological advancements and changing consumer behaviors.

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