Artificial intelligence is seeping into every corner of American life. Cryptocurrency mining is poised to grow. More people are buying electric cars. And heavy industry is returning to the U.S. — and embracing electrification.
Together, these shifts are creating a sustained spike in electricity demand that is expected to accelerate over the next four years, just in time for Donald Trump’s presidency.
For the first time since the 1980s, electricity demand is forecasted to grow significantly every year of the incoming president’s term. Unlike previous periods of growth in electricity demand in American history, there are no simple saviors like nuclear power or increasingly efficient appliances and lightbulbs waiting in the wings. The electric grid is old, strained and designed for a different era of electricity use.
That means Trump has the opportunity to chart the course of American energy production well beyond his time in the White House.
“For the last 15 years, we’ve had a sense that if you’re for fossil fuels, you’re on the political right. And if you’re for renewable energy and climate action, you’re on the political left. And I think that the AI-specific load growth is going to upend everything, and that chapter of our energy politics is closed,” said Neil Chatterjee, a former chair of the Federal Energy Regulatory Commission during the first Trump administration. “There is bipartisan and universal agreement that we need to win the AI race against China. That’s going to cause both parties to recalibrate their positioning on energy and climate policy.”
Joe Biden strove to set the U.S. on a course toward a clean energy future with a sweeping climate agenda that has spurred hundreds of billions of dollars in clean energy and manufacturing investments. The Inflation Reduction Act, the infrastructure law and the CHIPS law combined create powerful financial incentives for a clean energy transition.
Trump and the Republicans in Congress have pledged to roll back many of those incentives and simultaneously increase investment in the oil and gas industries. But the energy demands of data centers and AI, combined with the ongoing massive private sector investment in clean energy, electrification and EVs, are likely to derail both Biden’s and Trump’s vision for the future of American energy.
The incentives in Biden’s landmark pieces of legislation may contribute to the load growth problem: Wind and solar power are variable sources of energy, but data centers are demanding 24/7 sources of power. And for Trump, it’s likely that natural gas and advanced innovative technologies will not provide nearly enough power fast enough nor will they meet the climate demands of the tech companies driving the load growth surge.
In the last six weeks of the year, three groups published data to quantify the enormous size of the problem. First came research that forecasted total electricity demand in the U.S. would increase by almost 16% by 2029, largely due not only to data centers but also to investment in manufacturing plants for semiconductors and batteries. That report, from the transmission and clean energy consulting firm Grid Strategies, dramatically upped the organization’s previous estimates for power sector demand, a fivefold increase from previous forecasts.
Then came a warning from the group responsible for ensuring the nation’s electric grid doesn’t face blackouts: Risks for reliability over the next decade are increasing all over the country, and the middle part of the country is now at high risk for too little power even during normal energy conditions. Almost all of North America “faces mounting resource adequacy challenges over the next 10 years as surging demand growth continues,” the North American Electric Reliability Corporation wrote in its December long-term assessment.
Finally came the news that U.S. data center electricity use has tripled over the last 10 years. Those findings were part of a much-anticipated study from the Department of Energy, which also predicted that data center load growth would again double or even triple over the next four years — the length of the coming Trump term.
“We’re entering a new era. People call it the energy transition. I call it the energy transformation,” said Charles McConnell, the executive director of the center for carbon management in energy at the University of Houston and a former Department of Energy fossil fuels official under Barack Obama.
“And I think there’s a real simple answer,” he said. For McConnell, Chatterjee, many Republicans in Congress and the incoming secretary of energy, Chris Wright, that answer is natural gas. Because natural gas is so cheap in the U.S., power plants fired with this fuel can be built quickly and relatively cheaply compared to any other type of power plant that can ramp up and down its power production on demand.
McConnell and Chatterjee both say they’re not opposed to renewable energy. Instead, they believe the extraordinarily high energy demand will require the new administration to embrace more renewables and more gas. “The challenge is the power demand is so significant, there’s just not enough clean watts,” Chatterjee said.
The gas solution, as popular as it is with Trump and those in his cabinet, does have one big problem: There are many states that remain committed to decarbonization goals and have set them into law, and the major companies driving most of the load growth have similar commitments.
McConnell believes this can be solved by attaching carbon capture and storage technology to gas power plants to address the emissions problem.
“In our country, gas is so compelling economically,” he said. “And we’ve invested a tremendous amount of money in the Department of Energy with our own taxpayer dollars to prove that the carbon capture technology is not only technically but also commercially viable.”
But carbon capture remains exceedingly expensive and has limited deployment worldwide.
Rob Gramlich, the executive director of Grid Strategies, does not share that gas-centric vision for the future.
“Power demand growth challenges state, federal and corporate decarbonization goals. But it doesn’t mean they are impossible. It means it just got a little harder,” he said on a call with reporters. “I’m optimistic that we can build a lot of renewables fairly quickly and that the transmission required for any new resources can be done in a few years.”
When pressed about the realities of the coming demand, he conceded that currently existing gas and coal-fired power plants will likely have a longer lifespan than they would otherwise.
“If it’s going to be a high renewables scenario, there’s also going to be a need for some type of firm backup, which means certain power plants will probably be around,” he said. “But that doesn’t mean they operate a lot.”
Meta, Microsoft, Google and Amazon continue to make sweeping statements about their commitment to decarbonization. But they have also said that the AI race has derailed their original net-zero plans. Take Google, for example. Despite a massive swatch of climate commitments, the company’s emissions increased by about 50% over the last five years. The company said that its 2030 net-zero goal “won’t be easy” to reach in its latest environmental report.
Still, these companies are already demanding their energy come from clean sources, meaning that Republicans’ natural gas agenda will likely face major push back.
“It’s going to be a multibillion-dollar company that’s building a giant data center in your state that says, I don’t want you to keep a bunch of coal online and build new gas plants. I want clean energy and batteries and more transmission and a smarter grid,” said Jackson Morris, a state policy director for the Natural Resources Defense Council.
At this point, experts on every side of the political equation believe that there will not be one energy source that can meet the moment. Wind, solar, batteries, carbon capture, transmission build-outs, grid modernization, gas and even keeping coal plants online will all be needed, they say.
The major challenge will be to rapidly increase the number of power producers connected to the grid and convince the public to back these projects, whether they’re wind farms or natural gas pipelines.
“The very same playbook that was used to frustrate natural gas pipelines is being used to frustrate the build-out of transmission lines to bring more clean energy onto the grid,” Chatterjee said. “Americans don’t want energy infrastructure coming through their backyards, whether it’s a pipeline to deliver gas or transmission line and deliver clean energy.”
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Anna Kramer is a reporter at NOTUS.