Electricity demand in the United States will grow 2% annually over the next quarter century, driven by data centers and building electrification, industry and transportation, the head of the National Electrical Manufacturers Association said Wednesday.
NEMA will release its study “in the next couple of weeks,” CEO Debra Phillips said during an Axios-led event. “Our forecast is in the moderate range.”
“By the time we get to 2050, [that’s] 50% growth over where we are today,” Phillips said. “In large part, data centers over the next decade are going to be the key driver.” NEMA expects to see 300% growth in electricity demand from data centers, “and the rest coming from electrification of buildings, industrial systems, e-mobility.”
“We haven't seen growth like this in a very long time — for decades — so we need policy solutions,” Phillips said.
Energy incentives in the Inflation Reduction Act are “at the center” of a conversation on how Republicans can pay for tax cuts, she said.
“From our point of view, the IRA has done a lot to bring manufacturing back home,” Phillips said. “Our industry has decreased its dependence on Chinese imports by about 20%, in part due to IRA. So we hope it's preserved.” Some incentives, including for increased manufacturing of distribution transformers, could be expanded, she added.
The U.S. House on Tuesday passed a budget resolution including $1.5 trillion in spending cuts and about $4.5 trillion in tax cuts over a decade. “Over 10 years, IRA clean energy provisions are roughly a trillion dollars,” Sen. Tina Smith, D-Minn., noted at the same Axios event
“As they go hunting in order to pay for their tax breaks, they're going to come looking,” Smith said. “We have to do everything we can to defend this. We have to help folks understand how these investments are good for jobs and good for economic opportunity in red districts as well as other districts.”
The House bill calls for $880 billion in cuts from the House Energy and Commerce Committee. Rep. Bob Latta, R-Ohio, is on the committee and said energy may not make up as much of the cuts as some people may think.
“On the energy side ... the Biden administration, starting around Labor Day last year, was pushing a lot of money out the door. So as you think about clawback and certain things, there's not as much there as some people had anticipated,” Latta said.
