Grid Strategies: U.S. Electricity Demand to Increase 15 Percent by 2029

Grid Strategies, a power sector consulting firm, recently released a report examining U.S. electricity demand and forecasted load growth. According to the report U.S. electricity demand could rise as much as 128 GW over the next five years, primarily as a result of data center buildout and manufacturing growth across the country. That estimate, 128 GW, represents a five-fold increase in load growth forecasts over the last two years.

There are six regions driving load growth through 2029: PJM (representing data centers in Northern Virginia), Georgia Power, MISO, ERCOT, SPP and the Pacific Northwest. ERCOT, PJM, Georgia Power and the Pacific Northwest’s load growth are being driven by data centers and chip manufacturing specifically. Grid Strategies notes utilities’ low-growth era over the last two decades, which has contributed to a lack of preparedness, as data center planning and construction booms. Investing in and expanding the grid will be vital for maintaining reliability and sustaining the high load growth forecasted for these areas. Specifically, constructing more transmission lines, new generation assets and enhancing transfer capabilities in order to maintain reliability in these regions is urgently needed.

It is important to note that Grid Strategies stated the data center mania could represent a “bubble,” like the initial internet boom. According to the report, “overbuilding in the 1990s contributed to bankruptcy by major independent power generators,” due to overestimating the internet’s energy bubble. Grid operators, energy developers and investors must use caution to avoid a similar scenario, but acknowledging and addressing the potential shortcomings of our energy grids now will pave a way for serious discussion on how to fortify energy security.