According to the EFI Foundation, electricity use in the US has been relatively flat since 2000. That is going to change dramatically in the next five years. Several factors are contributing to that.

But first, some basic information. In the US, power generation and power distribution are two different programs that involve different companies, sometimes without the same priorities. The US also is in the process of changing fuels from coal and natural gas to alternative fuels such as solar, wind, nuclear, and thermal power. This process will take years.

The new demand for electricity comes from the rapid expansion of data centers for cloud computing and artificial intelligence. The second is the projected growth in onshore manufacturing operations funded by the Inflation Reduction Act. The third is the rapid increase of electrification in the US. That includes electric vehicles and electric heat pumps and water heaters in buildings instead of natural gas.

The projected growth in electricity load growth is projected to double in the next give years. The demand and capacity vary widely depending upon the regions in the country. The big question is how to pay for this growth. Utility companies are reluctant to make investments of millions of dollars without reliable contracts to serve as collateral for this growth. Not every tech company that has requested additional capacity has followed through with a fixed contract.

With such a rapid expansion of capacity, the major concern is the need to continue to supply a reliable source of electricity. If in the process of making all these changes, customers face intermittent electric power they will sue the power and generating companies. Texas saw the effects of this when their electric grid failed in February 2022 due a big increase in demand that exceeded capacity.

To put it in simple terms, can the industry walk and chew gum at the same time? It will be a balancing act. To date, the government hasn’t invested a lot of money to increase electricity capacity. Will the banks be willing to loan on speculation, and is the technology advanced enough to be able to carry the load? At this point, there are no answers.

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