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NextImg:Power demand to soar 15% in next five years thanks to AI and manufacturing boom - Washington Examiner

U.S. electricity demand is forecast to increase five times faster than previously estimated over the next five years, driven by the rise of data centers and manufacturing. 

In a new report, “The Era of Flat Power Demand is Over,” Grid Strategies projects that the U.S. electricity load in 2029 will hit 947 gigawatts, representing 15% growth in demand in just five years. The scale of anticipated load growth has increased five times over the last two years.

If the forecast load growth is correct, the report said, annual peak demand growth will average 3% per year over the next five years, which would mean six times the planning and construction of new generation and transmission capacity. The increased forecast load is mainly driven by industries like semiconductor chip manufacturing, artificial intelligence, and battery manufacturing. 

“It is worrisome that strategic industries, such as the development of an American advanced manufacturing sector or AI leadership, may face headwinds from the limited ability of the nation’s electricity systems to respond. Electricity systems need to supply new generation, connect that generation to load, and – of course – connect new load to the system,” the report said. 

It added, “There are real risks to America’s economic, technological, and geopolitical leadership if the grid can’t keep up with demand.” 

The load forecasts in the report are primarily based on data filed in the Federal Energy Regulatory Commission Form 714, which collects information from electric utility balancing authorities and planning areas nationwide.

As energy demand continues to rise in the U.S., the Biden administration has sought to meet these demands by providing incentives through the Bipartisan Infrastructure Act. However, the nation’s grid has been slow to expand. 

The report said large-scale transmission investments are needed to “reliably and affordably meet demand,” but policy changes, such as permitting reform, are required. 

Rob Gramlich, president of Grid Strategies LLC, said that with the high power demand, transmission lines should not take 18 years to build out. 

He said, “There’s no reason we shouldn’t be able to build these lines in five or six years, and permitting reform will really help us get closer to those five or six [years].” 

Some lawmakers in Congress hope that the lame-duck session will allow them to move bipartisan permitting reform legislation authored by Sens. Joe Manchin (I-WV) and John Barrasso (R-WY), the Energy Permitting Reform Act of 2024.