EIA: “US electricity consumption forecast to be at record highs this year and next year”

It is predicted that U.S. electricity consumption will hit record highs this year and next year due to demand for artificial intelligence (AI) data centers.

In the Short-Term Energy Outlook (STEO) released on the 6th (local time), the U.S. Energy Information Administration (EIA) predicted that U.S. electricity consumption will increase from 4.195 trillion kWh, a record high last year, to 4.288 trillion kWh this year and 4.356 trillion kWh next year.

The increase in demand is mainly driven by data centers. Reuters reported that the electrification trend, in which homes and businesses use more electricity instead of fossil fuels for heating and transportation, is also boosting demand.

By sector, commercial sales, including data centers, are expected to reach 1.549 trillion kWh this year, up 3.8% from last year's peak. This growth rate is more than twice the growth rate for residential use (1.7%). EIA predicted that commercial demand will increase by 2.8% next year.

EIA predicted that U.S. wholesale electricity prices this year would average $52 per megawatt hour (MWh), up 11% from last year. Extreme weather, including winter storms and hotter-than-normal summers, is the main factor.

Wholesale power prices in the PJM jurisdiction, which supplies electricity to 13 East Coast states, including Virginia, where data centers are concentrated, were expected to soar 41%, but in the Mid-Columbia region of the Pacific Northwest were expected to fall 23%.

By power generation source, the proportion of renewable energy is expected to increase from about 24% last year to 27% next year, while the proportion of coal is expected to decrease from 17% to 15%.