The US is poised for a significant rise in electricity demand, driven by the rapid expansion of data centers and the widespread adoption of electric vehicles (EVs). According to Rystad Energy’s latest research, these two sectors alone are expected to add 290 TWh of new demand by 2030, marking a substantial shift from the relatively stable demand of around 4,000 TWh since 2010.
The surge in data center electricity consumption is particularly notable, with a heavy emphasis on those focused on artificial intelligence (AI). AI data centers consume more electricity compared to traditional computing facilities, leading to a combined increase in demand of 177 TWh from 2023 to 2030. This will bring the total electricity consumption by data centers to 307 TWh, more than double the 2023 levels of 130 TWh. This growth underscores the US’s efforts to establish itself as a global hub for data centers.
In parallel, the transportation sector is set to see a dramatic increase in electricity consumption due to the rise of battery electric vehicles (BEVs). From a modest 18.3 TWh in 2023, EV-related electricity demand is projected to soar to 131 TWh by 2030.
“The growth in electricity demand from these sectors is equivalent to the total electricity demand of a country like Turkey,” said Surya Hendry, Analyst at Rystad Energy. “This growth presents a race against time to expand power generation capacity without overloading the electricity systems.”
Renewable energy is expected to be key in meeting this increased demand. Rystad Energy forecasts that total US power demand across residential, commercial, and industrial sectors will grow by 175 TWh between 2023 and 2030, bringing the country’s total demand close to 4,500 TWh. To support this growth, renewable energy capacity is expanding rapidly, spurred by incentives from the Inflation Reduction Act (IRA).
Solar PV capacity is projected to increase by 237 GW between 2023 and 2030, while wind capacity is expected to grow by 78 GW. This expansion is anticipated to not only meet the rising power demand from data centers and EVs but also continue the displacement of coal in the US power generation mix.
Coal reliance in the US has been diminishing, contributing to a smaller carbon footprint. This trend is set to continue, with coal generation expected to decline while overall power generation rises. The power mix will increasingly be defined by renewable energy growth, supported by the IRA and decreasing costs for solar and wind technologies.
The residential sector is projected to see a 10% increase in electricity demand, from 1,466 TWh in 2023 to 1,600 TWh in 2030, driven by the promotion of home electrification for heating, cooling, and cooking, as well as the ongoing work-from-home culture post-pandemic.
In contrast, the commercial sector is expected to see a decline in power demand, from 1,237 TWh in 2023 to 1,158 TWh by 2030, due to lower office space utilization and the shift towards energy-efficient buildings and e-commerce.
The industrial sector is anticipated to experience a 9% increase in electricity demand, from 1,133 TWh in 2023 to 1,238 TWh in 2030. This growth will be driven by federal policies encouraging domestic manufacturing and decarbonization efforts.
As the US moves towards a more electrified and renewable energy-driven future, the ability to manage and meet this increasing demand will be crucial for sustaining economic growth and achieving climate goals.
