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Data centers drive U.S. electricity demand

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7/11/2025

After years of stagnation, digitalisation is leading to a significant increase in electricity demand  

futuristic cityscape at night with motion blur and light trails and a sense of speed and energy
Data centers drive U.S. electricity demand

U.S. electricity demand is surging again. In its latest Short-Term Energy Outlook, the U.S. Energy Information Administration forecasts that annual electricity consumption will increase in 2025 and 2026, surpassing the all-time high reached in 2024. This increase is mainly driven by higher demand from data centers for artificial intelligence and operations.[1]

This rise in demand is something new. It follows 15 years of relatively flat electricity demand from the mid-2000s to the early 2020s. Total electricity sales are projected to reach 4,193 billion kWh in 2025 and 4,283 billion kWh in 2026, up from a record high of 4,097 billion kWh in 2024.

Electricity demand grew by 2.3% in 2024, and similar growth rates are projected for 2025 and 2026. From 1991 to 2007, electricity demand in the USA increased by around 1,000 billion kWh to reach approximately 3,900 billion kWh – before remaining stagnant at this level until 2021.

Share of industrial electricity demand in the U.S. has declined significantly

 

Sources: U.S. Energy Information Administration, DWS Investment GmbH as of June 2025

The reigniting of electricity demand in the U.S. reflects underlying change in the U.S. economy. The industry’s share of consumption has declined, reflecting the U.S. economic shift from factory-based industries to information technology and services. The commercial sector, in which data centers are a growing source of demand, now accounts for 37% of end-use electricity demand, up from 31% in 1991. Meanwhile the industrial sector's share of end-use electricity demand has declined from 34% in 1991 to 26% in 2024. In absolute terms, industrial sector electricity demand has remained stable at approximately 1,000 billion kWh since 1991, while commercial sector demand has risen significantly from 855 billion kWh in 1991 to 1,434 billion kWh in 2024.

“This shift reflects a broader transition in the U.S. economy from industrial activities to information technology,” said Virginie Galas, Head of CROCI Company Analysis at DWS.

According to ICF, a global energy consulting services company, electricity demand is expected to grow by 25% by 2030 and by 78% by 2050 compared to levels in 2023. This equates to an annual growth rate of 3.2% until 2030 and 2.2% until 2050.[2] A similar study by the National Electrical Manufacturers Association (NEMA) predicts growth of “only” 50 percent by 2050,[3] but one thing seems clear: a new era of rapid electricity demand growth has begun.

 

1

All data – unless otherwise quoted – from U.S. Energy Information Administration as of June 2025

2

America’s growing electricity demand, ICF as of 6/9/25

3

A Reliable Grid for an Electric Future, NEMA as of January 2025

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