Driven by data centers and transportation electrification, U.S. electricity demand will increase 2% annually and 50% by 2050, the National Electrical Manufacturers Association said in a study published Monday.
Improvements to energy efficiency will mute some potential demand gains, leaving the electrical manufacturing group’s projections “somewhere in the middle” compared with other recent studies, NEMA President and CEO Debra Phillips said in a Friday discussion of the report.
The analysis, completed for NEMA by PA Consulting, anticipates 300% growth in data center energy consumption over next 10 years and 9,000% projected growth in e-mobility power consumption through 2050.
The electric vehicle deployment curve has “flattened” in recent years but “we still think the promise is there, for the consumer,” Phillips said, pointing to advances in battery technology establishing greater range and improving prices.
The electricity demand expected in the next quarter century “is fairly remarkable,” Phillips said, adding, “our grid wasn't designed really to meet demand growth at this rate ... and so we're going to have to get creative around the technology and policy solutions that are going to help us meet the demand.”
On the policy front, NEMA’s report calls for:
- Permitting and siting reform, including for generation, transmission, distribution and critical minerals development, improved interregional electric transmission and the adoption of grid enhancing technologies;
- Tax certainty around incentives for grid technologies and domestic manufacturing of critical grid infrastructure, and incentives that enable utilities to make significant smart grid, distributed energy, and resiliency investments;
- An all-of-the-above approach to energy resources, including natural gas, small modular reactors and geothermal.
In the face of “unprecedented” growth in energy consumption and challenges posed by aging grid, “utility operators will require cutting-edge solutions that enhance the resilience and reliability of our grid,” Michael Plaster, executive vice president and lead business manager for ABB’s U.S. electrification business, said in a statement.
Energy storage will be key: NEMAs’s report estimates that over the next 15 years, “the amount of storage connected into the U.S. electricity grid will grow by 1,100%.”
Data center and EV growth mean U.S. electricity consumption changes will vary by region, NEMA said. “The Mid-Atlantic and Texas will see the largest data center electricity demand growth through 2035, and the Northeast and West will experience the largest electricity demand growth from EVs between 2035 through 2050,” the group said.
