(Oil Price) – U.S. electricity consumption is set to hit record-high levels this year and next, as demand from data centers and industrial customers soars, the U.S. Energy Information Administration (EIA) said in its latest Short-Term Energy Outlook (STEO).
America’s power use will hit 4,187 billion kilowatt-hours (kWh) in 2025 and then rise to 4,305 billion kWh in 2026, the monthly report showed. The previous record of 4,097 billion kWh was set in 2024.
As a result of the growing demand from data centers and industrial customers, the EIA raised its forecast for U.S. electricity generation this year and next.
The administration now expects that total U.S. generation by the electric power sector will increase by 2.3% in 2025 and a further 3.0% next year.
These growth rates are higher than the EIA expected at the beginning of the year when it projected U.S. electricity generation would rise by an average of 1.5% in each of 2025 and 2026.
The higher growth in generation reflects colder-than-expected weather earlier in 2025 along with the incorporation of load growth assessments by grid operators in the Electric Reliability Council of Texas (ERCOT) and PJM systems, the EIA noted.
America’s electric utilities are preparing for the surge in electricity demand coming with the data centers powering AI. Utilities have increased investments as they see unprecedented demand growth in the coming years after two decades of flat U.S. electricity consumption.
U.S. power utilities are investing a record amount of money into transmission and grid connection. But current forecasts of AI-driven power demand vary so much that there is a massive margin of error, analysts and utility officials told Reuters Events in June.
Onshoring of manufacturing activity and AI-related data centers are driving an increase in U.S. electricity consumption, Goldman Sachs said in a report earlier this year.
U.S. electrical power demand is expected to rise by 2.4% each year through 2030, with AI-related demand accounting for about two-thirds of the incremental power demand in the country, the investment bank said.
By Tsvetana Paraskova for Oilprice.com
