After decades of little to no growth, electric demand in the United States is forecast to increase 50 percent by 2050, according to a new study by the National Electrical Manufacturers Association (NEMA). The study, A Reliable Grid for an Electric Future, was released Monday.
“And that’s pretty unprecedented,” Debra Phillips, NEMA president and CEO, said in a webinar briefing with reporters Friday. “Over the last several decades, electricity demand has been relatively flat. We’ve made gains in efficiency at the same rate the demand was growing.”
Data centers powering artificial intelligence are expected to account for nearly 9 percent of electricity demand in the United States by 2030, according a new white paper by the American Council for an Energy-Efficient Economy. That’s enough electricity to meet the charging needs of electric vehicles if 20 percent to 40 percent of today’s cars were EVs, according to the report. Fully electric vehicles only make up about 9 percent of the U.S. market share for light-duty vehicles, according to the U.S. Energy Information Administration.
The increased demand for electricity is expected to first be driven by data centers across the next decade, with much of this growth in the Mid-Atlantic states and Texas.
“That’s no surprise,” said Phillips, pointing to where data centers are being developed and the increased computing needs of artificial intelligence.
“Over time, over the ensuing 10 to 15 years, a large portion of that growth, to the tune of about 9,000 percent growth, is what we’re expecting from e-mobility,” she said, indicating that while much of this electric demand growth will be happening in the Northeast and West, use of electrified transportation is also expected to accelerate, in part due to regulatory mandates from states like California, Oregon, Washington, New York and others.
Yes, the EV adoption curve “has maybe flattened a little,” in the last year or so, Phillips said.
“But we still think the promise there in EVs, for the consumer … is going to drive adoption,” she added, citing the advent of better batteries and cheaper costs.
Increased electric demand is expected to require upgrades and efficiencies across the spectrum of utilities and among the users of electricity.
The 2022 Inflation Reduction Act included numerous incentives for electric utilities and consumers to both improve efficiencies while also ushering in clean energy reforms. The law was perhaps the most significant piece of climate change-focused legislation passed in the United States, serving up a number of tax credit and rebate programs to incentivize energy storage, renewable energy generation and more efficient appliances. The Trump administration has halted “the disbursement of funds appropriated through the Inflation Reduction Act of 2022,” the White House said Jan. 20, as well as dozens of other measures taken by President Biden to address climate change.
These moves and the latest round of global tariffs, which have rocked the financial markets and shaken the global economy, have injected uncertainty into the electrical industry, officials said, at a time when the focus should be on preparing the electric grid for the challenges of the next two-plus decades.
“The federal government should really look at where they can best invest their money to help the utilities, to help the manufacturers really invest in the right places so we have grid resiliency, and enough electricity so we don’t have brownouts, blackouts,” Rich Stinson, president and CEO of Southwire, a maker of electric wiring and cable used in the electrical and communications industry, said during the call with reporters.
Incentives to modernize manufacturing in the Inflation Reduction Act “have been really important to building out the ‘all-of-the-above’ energy and electrical grid structure that we’re going to need for decades to come,” Phillips said.
“We want certainty. We want predictability,” she added. “We want focus on the North American trade zone. We want to make sure that our U.S. enterprises stay competitive. We would really like the administration to understand that as much as we want some critical supply chains to move, that doesn’t happen overnight. We need transition periods to bring some of those supply chains back, and we’re prepared to be a partner in doing that.”
