Utilities will struggle to meet U.S. electricity demand, which is experiencing the largest growth in decades, according to a new report from consulting firm Wood Mackenzie.
The report predicts that electricity demand will grow between 4 percent and 15 percent through 2029, depending on the region. That growth, analysts found, will be driven by data center development, a resurgence in domestic manufacturing and the electrification of industries such as transportation and heating.
“Because it’s a surprise, because this demand wants to connect now, and because planning and building new infrastructure typically takes five to 10 years, the utility industry is not prepared to meet the demand that wants to connect,” said Chris Seiple, the author of the study, in an email.
Data centers alone may need 25,000 megawatts of new power over the next five years, due to the growth of artificial intelligence, according to the report. U.S. manufacturing projects in areas such as battery, solar and semiconductors are expected to add up to 15,000 megawatts of demand. And the wider electrification of the economy could add another 7,000 megawatts of demand through 2030.