(Bloomberg) -- Electricity demand in the US is set to soar for the first time in decades, with growth as high as 15% in some regions over the next five years, according to energy consultancy Wood Mackenzie.
Different regions will see power demand spikes due to various factors: manufacturing will drive consumption in the Southeast and New York, data centers will push up use in the grid that stretches from Illinois to Virginia, and the electrification of transport and heating will fuel demand in New England, Wood Mackenzie said Thursday in a report. Such a rapid increase in demand will pose “a major challenge” for the industry, the firm said.
“In most industries, demand growth of 2% to 3% per year would be easily managed and welcomed,” said Chris Seiple, Wood Mackenzie’s vice chairman of power and renewables and the report’s author. “In the power sector, however, new infrastructure planning takes five to 10 years, and the industry is only now starting to plan for growth.”
The rise threatens to complicate the energy transition and efforts to shut down fossil fuel power plants, though technology companies prefer clean energy for their data centers. Amazon.com Inc., Alphabet Inc.’s Google and Microsoft Corp. have each announced nuclear deals in the past month that aim to power their operations with carbon-free generation.
“The last time the US electricity industry saw unexpected new demand growth like this was during World War II,” Seiple said in a statement. That’s when manufacturing output tripled and electricity demand rose 60% between 1939 and 1944. There was a national effort that brought together industry and policymakers back then — and Seiple said a similar effort is needed now.
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