BAKU, Azerbaijan, January 20. The US power sector is undergoing significant changes, with electricity consumption projected to surpass 4,200 terawatt-hours (TWh) for the first time in 2025, according to Rystad Energy, an independent research and energy intelligence company based in Norway, Trend reports.
This 2% increase from 2024 reflects the growing demand from data centers and a shift towards a mix of traditional and renewable energy sources.
Data centers, which accounted for nearly 40% of global demand in 2023, are at the core of this transformation. Rystad Energy forecasts an additional 60 GW of capacity in the US by 2035. The US is taking advantage of low-cost energy, tax incentives, and strong infrastructure to lead the data center sector, with Virginia and Texas emerging as key investment hubs.
Rystad Energy highlights the need for strategic investments in grid infrastructure and energy storage to support the sector’s growth. Natural gas is gaining importance, with new capacity projects planned in the coming years. However, aging transmission infrastructure presents a challenge.
On January 14, 2025, President Biden issued an executive order to accelerate the permitting process for data centers and clean energy projects on federal land. Rystad Energy reports that there is bipartisan support for making federal land accessible to these projects, although stringent clean power requirements may face opposition.
While solar growth may plateau after a record 2024, energy storage is thriving, with battery installations expected to rise another 35%. However, Rystad Energy warns that rising transmission costs will keep electricity prices high, despite falling natural gas prices.