U.S. electricity demand to grow 50% by 2050

The U.S. is expected to see electricity demand increases of two percent annually and 50 percent by 2050, according to a new study commissioned by the National Electrical Manufacturers Association.

The growth will be driven by data center energy consumption and expected electrification of transportation. The NEMA study’s demand estimates are “somewhere in the middle” compared with other studies, according to Utility Dive, because it assumes improvements in energy efficiency. The study expects a 300 percent growth in data center energy consumption over the next 10 years and a 9,000 percent projected growth in electrification of transportation.

Electrification of transportation would be driven by an uptake of electric vehicles, which may not come to fruition because federal and state policies seem likely to no longer incentivize it. However, the study expects 55 million light-duty EVs on the road by 2035, driven largely by the states “comprising 30% of new car sales” that “have adopted California’s Zero Emissions Vehicle regulations.”

Minnesota adopted California’s standards, which went into effect in 2024, and because these were adopted “as amended,” whenever California makes its standards stricter, Minnesota will have to follow suit. Given higher up-front costs and fluctuations in the prices of battery metals, expecting higher EV adoption without mandates and coercion seems unlikely.

The report calls for:

• Permitting and siting reform, including for generation, transmission, distribution and critical minerals development, improved interregional electric transmission and the adoption of grid enhancing technologies;

• Tax certainty around incentives for grid technologies and domestic manufacturing of critical grid infrastructure, and incentives that enable utilities to make significant smart grid, distributed energy, and resiliency investments;

• An all-of-the-above approach to energy resources, including natural gas, small modular reactors and geothermal.

Permitting reform and more domestic critical minerals development will be instrumental, and so will natural gas and nuclear technology like small modular reactors. Yet a data center can’t shut down when the wind isn’t blowing and the sun isn’t shining. Instead of “all of the above,” how about prioritizing “reliable and affordable” energy? It’s a wild idea.

This demand projection is lower than projections from other firms, including one from Grid Strategies that expects electricity demand to increase 15.8 percent by 2029 based on annual planning reports submitted to the Federal Energy Regulatory Commission. Whatever electricity demand growth comes to fruition, there will be growing needs for reliable, baseload generation like coal, natural gas, and nuclear.