US electricity demand is forecast to climb to record levels in 2025 and 2026, according to the Energy Information Administration’s latest Short-Term Energy Outlook. Total consumption is expected to reach 4,187 billion kWh next year and 4,305 billion kWh in 2026, surpassing the 2024 high of 4,097 billion kWh.
The steep increase reflects the rapid expansion of power-intensive data centres — particularly those supporting artificial intelligence and cryptocurrency — and a broader electrification push across heating, transport, and commercial operations. Regions experiencing heavy industrial build-out are seeing the sharpest load growth, with demand rising across residential, commercial, and industrial sectors. Residential sales alone are forecast at 1,508 billion kWh in 2025, close to the 2022 record.
Rising demand is already tightening capacity markets. In the PJM Interconnection, which serves 67 million people including northern Virginia’s data centre corridor, auction prices have surged from $28.92 per MW-day in 2024–25 to $269.92 per MW-day for 2025–26, with a cap of $329.17 per MW-day for 2026–27. PJM forecasts an additional 32 GW of load by 2030, of which 30 GW will come from data centres. Developers are responding with planned investment in natural gas, renewables, battery storage, and hydropower capacity.
The generation mix is shifting as a result. Natural gas is projected to fall from 42 percent of supply in 2024 to around 40 percent through 2026, while renewables rise from 23 percent to 25–26 percent. Coal is set to hold steady at 16–17 percent, with nuclear declining slightly. Despite increased renewable penetration, developers have trimmed capacity plans from 186 GW in 2024 to 155 GW, while natural gas build-out is set to double. Battery storage additions are expected to provide critical balancing capacity, though the scale lags far behind the forecast load increases.
The outlook highlights the infrastructure challenge of a grid under accelerating electrification. Without upgrades in transmission and distribution, coupled with stronger incentives for renewables and storage, the system risks leaning more heavily on dispatchable fossil capacity — driving up costs and carbon intensity.
The EIA forecasts leave little doubt: electricity demand in 2025 and 2026 will test the resilience of US power networks and the policy frameworks that underpin them.
