U.S. Electricity Consumption Expected to Increase During 2025 and 2026: EIA

U.S. annual electricity consumption is forecast to increase during 2025 and 2026, exceeding the record high reached during 2024, according to a May 13 report published by the U.S. Energy Information Administration.  The increase is attributed to higher demand from the commercial sector, which includes data centers and the industrial sector which includes manufacturing establishments.

Across the U.S., unprecedented projections for electricity demand growth driven by data centers has prompted calls for additional capacity to maintain grid reliability. Data centers are expected to consume 6.7 to 12 percent of total U.S. electricity by 2028, up from about 4.4 percent in 2023, according to the U.S. Energy Department. Last month, the department issued a request for information to explore the potential utilization of federal lands for AI infrastructure expansion to support increasing demand for data centers.

U.S. electricity consumption has been flat for around two decades, with increases in consumption due to economic and population growth being offset by efficiency enhancements and other economical structural changes, such as the change from manufacturing to service sectors, that generally utilize less energy. Consumption has increased in recent years, having hit a relative low during 2020. The agency projects electricity consumption to grow at an average rate of 1.7 percent per year from 2020 to 2026.

The commercial and industrial sectors are driving the increase in electricity consumption, with the agency forecasting average growth rates of 2.6 percent and 2.1 percent, respectively per year. The increase in anticipated electricity demand has led to an increase in electricity storage and generation capacity. The additional capacity is from battery storage facilities and solar.

Electric utilities, grid operators and regulators, are also focusing on energy efficiency and demand response programs. Energy efficiency programs offer consumers incentives to increase efficiency and, therefore, decrease overall electricity demand. Meanwhile, demand response programs are implemented to decrease customer demand during times of very high system demand or emergencies.